Five Top Tech Takeaways: Google Faces an Unexpected AI Competitor, AI Overreach at Work, Sam's Back, SEC's Climate Disclosure Rules, and Apple $2 billion Fine

From Oversight to Overreach? AI's Expanding Role in Monitoring Employees

Robo-Surveillance

In Canada, the rapid advancement of artificial intelligence (AI) has significantly increased the capabilities for workplace surveillance, including tracking employees' locations, monitoring their computer activities, and even assessing their moods during shifts. Despite the growing prevalence of such technologies, experts highlight a concerning lag in Canadian laws to adequately address these changes. Current legislation, such as Ontario's requirement for employers to disclose their electronic monitoring policies, provides limited protections for employees against intrusive monitoring practices. Critics argue that while AI can streamline hiring processes and offer career assistance, its use in employee surveillance often lacks transparency and can be excessively invasive. The federal government's Bill C-27 aims to regulate "high-impact" AI systems but is criticized for not specifically addressing worker protections. As AI technology becomes more entrenched in workplace practices, there is a pressing need for comprehensive legal frameworks that protect employees' privacy and rights in the face of pervasive monitoring.

Key Takeaways:

• AI-driven workplace surveillance is increasing in Canada, with technologies capable of tracking and analyzing employees' activities in unprecedented ways.
• Existing Canadian laws fall short in protecting employees from the potential overreach of these surveillance technologies.
• Calls for more robust legislation and clearer guidelines on the use of AI in workplace monitoring are growing, amid concerns over privacy and the invasive nature of such practices.

(Source: CTV News)

SEC Finalizes Climate Disclosure Rules for Public Companies

The Securities and Exchange Commission (SEC) has finalized new regulations that mandate public companies to disclose their direct greenhouse gas emissions and the climate-related risks that might significantly affect their financial health. This decision, emerging from a protracted two-year review and intense lobbying from various sectors, marks a significant but contentious step towards enhancing investor access to crucial climate-related information. While the SEC has opted to exclude the requirement for businesses to report their indirect (Scope 3) emissions—citing concerns over the complexity and burden of such disclosures—this move has attracted criticism from environmental advocates who argue that it significantly underrepresents the total emissions footprint of companies. Nevertheless, the rule aims to provide investors with consistent, reliable climate risk disclosures, encompassing direct operations and energy purchases (Scope 1 and Scope 2 emissions), and necessitates reporting on how climate-related events like wildfires and floods could materially impact companies.

Key Takeaways:

• The SEC has implemented new rules requiring public companies to disclose their direct greenhouse gas emissions and climate-related risks that could materially impact their financials.
• Indirect emissions reporting (Scope 3) has been excluded from the requirements, sparking criticism for underrepresenting companies' total emissions.
• Despite the controversy, the rule aims to enhance transparency and reliability in climate risk disclosures for investors.

(Source: The Wall Street Journal)

Apple's Antitrust Awakening: A $2 Billion Fine for Restricting Music Streaming Competition

The European Union has imposed a €1.84 billion ($2 billion) antitrust fine on Apple, marking its first-ever penalty against the US tech giant for anti-competitive practices. This historic fine was levied due to Apple's restrictions that prevented rival music streaming services, like Spotify, from informing iPhone users about cheaper subscription options available outside of the Apple App Store. The EU's competition and digital chief, Margrethe Vestager, criticized Apple for abusing its dominant market position, thereby denying European consumers the freedom to choose their music streaming services under fair terms. Apple countered the EU's decision, claiming it was made without credible evidence of consumer harm and stressed the competitive nature of the app market. Apple plans to appeal the fine, which constitutes 0.5% of its global annual turnover, arguing that it ensures a level playing field for all app developers on its platform. The fine includes a significant lump sum intended to deter not only Apple but other large tech firms from future violations of EU antitrust laws.

Key Takeaways:

• Apple has been fined €1.84 billion by the EU for antitrust violations related to its App Store practices.
• The fine targets Apple's restrictions on music streaming services, which hindered competitors from offering cheaper subscription options outside of the App Store.
• Apple disputes the EU's findings, citing a lack of evidence for consumer harm and plans to appeal the decision.

Et Tu, Walmart? The Unexpected AI Challenger to Google's Search Dominance

Walmart's introduction of generative AI search capabilities marks a significant move in the retail industry, potentially challenging Google's dominance in the search engine market. Walmart CEO Doug McMillon highlighted the rapid improvement and customer-focused enhancement of the search experience within Walmart's app, powered by generative AI. This innovation not only streamlines shopping for events by providing comprehensive, theme-based recommendations but also establishes Walmart as a technological frontrunner in retail. The shift towards AI-enhanced searches by retailers like Walmart and others suggests a changing landscape where traditional search engines may lose their grip on the initial stages of the consumer shopping journey, as these platforms can offer more targeted, efficient, and intuitive shopping experiences directly within their ecosystems.

Key takeaways:

• Walmart's generative AI search feature aims to simplify event planning and shopping, challenging traditional search engine models.
• This move reflects Walmart's strategic emphasis on technology and innovation to stay ahead in the retail sector.
• The evolving AI search capabilities among online retailers could diminish Google's role in the initial steps of consumer shopping, potentially altering the search and shopping ecosystem.

(Source: CNBC)

Sam's on Board: OpenAI Announces Board Expansion and Enhanced Oversight Measures

OpenAI has announced the integration of three new board members and the reinstatement of CEO Sam Altman following an independent review by WilmerHale, which concluded that Altman's previous firing was unjustified. The investigation revealed no concerns over product safety, OpenAI's financials, or development pace but highlighted a trust breakdown between Altman and the former board. The review criticized the board's hasty decision-making process and lack of full inquiry. Altman, acknowledging his missteps in handling disagreements, has committed to improving his approach. The board's decision to reappoint Altman is accompanied by governance enhancements, including new guidelines and a whistleblower hotline, aiming to strengthen accountability and oversight within the organization.

Key takeaways:

• An independent review found Sam Altman's firing by the previous OpenAI board was unwarranted, attributing it to a trust breakdown rather than product or financial concerns.
• OpenAI reinstated Sam (as a Board Member) and has introduced three new board members and implemented governance enhancements, including new guidelines and a whistleblower hotline. Per Ars Technica, they include: "The newly appointed board members are Dr. Sue Desmond-Hellmann, former CEO of the Bill and Melinda Gates Foundation; Nicole Seligman, former EVP and global general counsel of Sony; and Fidji Simo, CEO and chair of Instacart."
• Sam Altman has acknowledged his mistakes in dealing with board disagreements and committed to handling such situations with more grace in the future.

(Source: Ars Technica)

Author: Malik Datardina, CPA, CA, CISA. Malik works at Auvenir as a GRC Strategist who is working to transform the engagement experience for accounting firms and their clients. The opinions expressed here do not necessarily represent UWCISA, UW, Auvenir (or its affiliates), CPA Canada or anyone else. This post was written with the assistance of an AI language model. The model provided suggestions and completions to help me write, but the final content and opinions are my own.

Verizon Mobile Push into Canada Evaporates: The Data Privacy Angle

Canadians had been anxiously awaiting the entrance of American telecom giant into the Canadian mobile market. For years, Canadians have lived under the domination of a few giant players, which has resulted in Canadians paying one of the highest - if not the highest - cell phone rates in the world.

The government of Canada actually dedicated a website, which actually illustrates the level of concentration in the market. Apparently, to address the issue "Ottawa rolled out the red carpet to attract the U.S. mobile giant in the hopes of establishing a fourth mobile competitor in all provinces - not only in Quebec, where Quebecor’s Vidéotron is giving the Big Three a run for their money. "(see the Globe & Mail article for the full context of the quote). As this Globe & Mail article, suggests the hope was that Verizon would have entered the market and forced the incumbents to offer better prices.

However, Verizon announced that it has cancelled any plans to enter into the Canadian market and thus dashing these hopes.

An interesting point to note, however, is the data security and privacy angle that the incumbents took to bolster their case to the Canadian public. As per the FairForCanada website (which is supported by the Big 3 Telecoms), they claim:
"Who do you want to own your private data? 

Across the country, Canadians use their wireless devices to make calls, send text messages and emails, and browse the internet every day. That information should be safe, secure, and private. 

Will American companies say no to requests from U.S. government agencies, for customers’ personal data? 

Canadian wireless providers have a solid track record of protecting your data in compliance with Canadian laws. But what will happen with regard to the data of Canadians in the hands of foreign-owned wireless carriers? What laws will regulate the protection of your information? This is not a trivial issue. It is one that should be of concern to all Canadians."

It seems that the advocacy group was riding the fear of Canadians that the US will have access to their data.

It seems they have done their research.

As noted in this ZDNet article, "Since being signed into law in 2001, the Patriot Act has been cited as a viable reason for Canadian companies, government departments and universities to avoid the cloud due to the close proximity to the United States". In other words, fear of US surveillance has led to low demand for US-based cloud services. Applying the same logic, the incumbents were playing on this same fear that Canadians would stick to them.

However, this is only part of the truth. The reality is that Canadian companies have had to comply with similar legislation that requires them to divulge data to Canadian law enforcement. As noted by the Office of the Privacy Commissioner of Canada:

" In the national security and anti-terrorism context, Canadian organizations are subject to similar types of orders to disclose personal information held in Canada to Canadian authorities. Despite the objections of the Office of the Privacy Commissioner, the Personal Information Protection and Electronic Documents Act has been amended since the events of September 11th, 2001, so as to permit organizations to collect and use personal information without consent for the purpose of disclosing this information to government institutions, if the information relates to national security, the defence of Canada or the conduct of international affairs."

This is on top of the recent CSEC scandal (where the secretive agency is alleged to have illegally spied on Canadians), but one could argue that such surveillance was actually illegal. Ultimately, I had hoped Verizon would have entered into the market, but only to push down the rates. I would have ended sticking with the Canadian mobile carriers because the data is one way or another in one jurisdiction.

However, all is not lost in terms of lower rates in the cell phone market.

It seems the government is hoping to entice voters by tackling a problem, which does impact the productivity of Canadians (see this post which compares Canadian mobile access to access in India/China). For example, the CRTC has mandated a number of changes to the cell phone contracts that the wireless industry can legally offer, such as restricting the minimum contract length to two years.

But from a data privacy perspective, it seems the only way to get privacy these days is to live a technology-free lifestyle of yesteryear!