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Digital Digest – 18 February

In this week’s digital digest we look at the FCA’s clampdown on ‘buy now, pay later’ companies and fears AI technologies are accentuating racial bias.

We then take a look at big tech as Amazon tries to stave off the unionisation of warehouse workers in the US and the EU takes on Big Tech in space.

Closer To Home

FCA orders refunds over ‘buy now, pay later’

Klarna, Clearpay, Laybuy and Openpay ‘buy now, pay later’ (BNPL) firms have been told that some of the terms given to customers in their contracts are unfair and unclear. The Financial Conduct Authority (FCA) found that the four firms were in breach of its rules. The ruling means that some customers may be due refunds.

The fintech firms have agreed to make amendments to problems found by the FCA by making contract cancellations and payments easier to understand for customers. In penance the firms have also agreed to offer refunds on late payments in some instances where customers were charged falsely.

Last year, Citizens Advice warned that one in ten BNPL customers were being pursued by debt collectors. They claimed that customers were, in some cases, unaware of the risks involved for some of their purchases. 

The Treasury recently agreed to introduce proportionate regulation of the industry. The FCA has said it will consult with the government on how to move forward with rule changes as they look to bring the BNPL industry more firmly under their regulatory umbrella. The FCA’s move is a sign that the wind is changing direction and could lead to a safer environment for consumers.

Rise of the racist robots prompts artificial intelligence upgrades

The Bank of England is launching a campaign to make sure that new technologies do not negatively affect ethnic minorities. The bank will publish findings on how AI algorithms are used in digital markets. Discrimination in artificial intelligence is becoming a hot topic in the tech world with increasing concern from regulators that relying on AI could lead to backwards steps in the fight to ensure that a consumers’ race or gender has no impact on their ability to utilise goods and services.

The Bank of England’s campaign follows an industry roundtable with banks in October 2021, the Bank’s deputy governor David Ramsden sent a warning to ensure that “human judgement and oversight” had no impact on decisions.

Various Big Tech firms have faced intense scrutiny after revelations on negative racial bias, including Amazon and Twitter. In the UK, the result of a court case involving Uber is due next month. The case was brought by an employee who has alleged that an AI facial recognition software was unable to identify him due to his race. These scandals have led the Competition and Markets Authority to scrutinise algorithms of tech giants to a greater degree to make sure that they are not targeting certain demographics unfairly. The CMA is also due to publish its findings in the coming months. 

US Amazon warehouse workers prepare for historic union vote

The US Labour Regulator has given a second chance for an Amazon warehouse in Alabama to be the first Amazon facility in the US to unionise after the original 2021 election result was overturned due to unfair interference by the tech giant. Other big US companies, including Starbucks and Target are also fighting union drives, a movement that could symbolise a shift in American politics with many moving to the left due to growing wealth inequality. Americans’ are now almost more supportive of unions than ever before

Some are more confident that this second vote could result in a win for the workers but Amazon is reportedly battling to ensure this vote also fails. The company is reportedly employing scare tactics to influence its workers with over half of the current staff being new to the company and having therefore not participated in 2021.

The move to unionise could be a response to the huge growth of the tech giant, whose net sales increased by 38% in 2020, hiring over 500,000 additional employees. The benefits of this growth have not been felt proportionately by the workers, despite seeing the high profile escapades of CEO Jeff Bezos. With polling suggesting that support for organised labour hitting 65%, the winds of change are picking up.

EU to take on SpaceX and Amazon with its own satellite internet system

The EU’s proposals for a multibillion satellite internet system have come under fire from the EU’s own watchdog. The trade Bloc plans to compete with the likes of SpaceX and Amazon with its initiative to provide encrypted broadband coverage. The European Commission’s Regulatory Scrutiny Board believes the scheme would be a waste of money, however, and has criticised the lack of exploration of alternative options.

The signal from the new Secured Communications Initiative would be encrypted and provide a back-up in case of cyber attacks. It would be offered to Africa as well as European nations, in order to give Europe’s Southern neighbour an alternative to Chinese-built infrastructure. The EUs internal market commissioner, Thierry Breton, stressed the need for an encrypted, sovereign system that governments and businesses can use, independent of America and China.

A public-private partnership will be used to get businesses to provide €2bn of the initial investment. One EU diplomat believes the plan will receive approval despite being rejected twice and seeing some reservations from member states.

Also In The News

  1. HMRC seizes NFTs for the first time as a result of a VAT fraud investigation, with suspects accused of attempting to defraud the tax collector of £1.4m. See here.

  2. Norfolk County Council is attempting to sue Apple over comments made by CEO Tim Cook, alleging that he misled stakeholders. See here.

  3. Elon Musk donated $5.74bn in Tesla shares to an unnamed charity last year, analysts claim it could be for tax benefit. See here.

  4. Uber is raising its prices in London after a High Court defeat imposes VAT on rides, this could eventually lead to changes in the wider UK. See here.

  5. Airbnb’s summer bookings figures signal recovery of the travel industry with expectation that numbers could return to pre-pandemic levels in the current quarter. See here.

Worth A Read

  1. Wired: Get Ready for Cyber-Attacks on Global Food Supplies

  2. Times: Youtube cashes in with advertisements on Covid misinformation videos

  3. Daily Telegraph: Beware: crypto fraudsters are here to stay


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