Africa Law & Tech Review Vol. 8

Welcome to the Africa Law & Tech Review, a publication, by Lawyers Hub, that delves into the intersections of law, technology, business, digital rights, and features policy advancements across Africa and beyond. The Lawyers Hub is an organization based in Kenya working at the confluence of Law, Policy, and Technology. Learn more about who we are and what we do.

Artificial Intelligence

The United Nations has passed its first resolution on artificial intelligence on a worldwide scale.

The United Nations General Assembly unanimously adopted the first global resolution on artificial intelligence that encourages countries to safeguard human rights, protect personal data, and monitor AI for risks. The nonbinding resolution, proposed by the United States and co-sponsored by China and over 120 other nations, also advocates the strengthening of privacy policies. The General Assembly also recognized AI systems’ potential to accelerate and enable progress towards reaching the 17 Sustainable Development Goals.

The resolution is the latest in a series of initiatives by governments around the world to shape AI's development, amid fears it could be used to disrupt democratic processes, turbocharge fraud or lead to dramatic job losses, among other harms.

The resolution encourages the private sector, research organisations, and other stakeholders to develop and support regulatory and governance approaches and frameworks related to safe, secure, and trustworthy artificial intelligence systems. It also encourages the private sector to adhere to applicable AI laws and increase collaborative efforts to promote equitable, fair, and inclusive business environments for AI. Additionally, it focuses on providing developing countries with access to AI advances and modern digital infrastructure.

US Vice President Kamala Harris hailed it as a?

“historic step toward establishing clear international norms for AI and for fostering safe, secure, and trustworthy AI systems.” “This resolution charts a path forward on AI where every country can both harness its potential and manage its risks,” Harris stated in a White House release.

The Assembly called on all Member States and stakeholders?

“to refrain from or cease the use of artificial intelligence systems that are impossible to operate in compliance with international human rights law or that pose undue risks to the enjoyment of human rights.”?

It affirmed that the same rights people have offline must also be protected online, including throughout the life cycle of artificial intelligence systems.

AI Transforming Cybersecurity Landscape: Experts Advise Vigilance in Africa

Recent studies reveal that Artificial Intelligence (AI) is reshaping the landscape for cybercriminals and defenders alike. According to new research , security analysts using Copilot for Security are approximately 44% more accurate and 26% faster, regardless of their expertise level.

The rise of deepfakes has been particularly alarming, increasing tenfold over the past year. The Sumsub Identity Fraud Report highlights African countries such as South Africa and Nigeria as hotspots for such attacks. These deepfake incidents can have severe financial repercussions for businesses, as evidenced by a recent case where a multinational firm employee was tricked into transferring $25 million to a cybercriminal impersonating a coworker during a video conference call.

Experts warn that as AI continues to evolve, cyberattacks will become increasingly sophisticated, especially in the area of social engineering. This poses a significant threat to African businesses, which are already grappling with high cybercrime rates. Nigeria and South Africa estimate annual losses due to cybercrime at around $500 million and R2.2 billion respectively. Kenya, on the other hand, witnessed a record-breaking 860 million cyberattacks last year.

A KnowBe4 survey revealed that 74% of African employees could easily be manipulated by a deepfake. However, AI also offers a solution to combat fraud attempts. For instance, Microsoft detects approximately 2.5 billion cloud-based, AI-driven threats daily.

To bolster cybersecurity, Microsoft's Cyber Signals report recommends several strategies for African firms. These include ensuring end-to-end data privacy and control, implementing conditional access policies, enabling multi-factor authentication for all users (especially administrators), and educating employees on phishing and social engineering attacks.

IT leaders should assess areas where AI interacts with their organisation's data, including third-party partners and suppliers, and apply strict input validation measures to prevent prompt manipulation.

As we navigate the evolving cybersecurity landscape, it's important to strike a balance between preparing securely for AI and leveraging its benefits. AI has the potential to enhance human potential and address critical challenges, but vigilance is key to mitigating its risks in the cyber sector.

Regulation

Regulations Bar Kenya Power Customers from Switching to New Distributors despite end of monopoly

Kenya has opened up the electricity distribution market to other firms, removing Kenya Power's monopoly. This move marks a significant step in ending Kenya Power's longstanding monopoly in the electricity distribution sector. However, millions of Kenya Power customers are now locked into the utility company despite recent market-opening measures. The Energy (Electricity Market, Bulk Supply, and Open Access) Regulations, 2024 , issued by the Energy Cabinet Secretary, prevent existing customers from switching to new distributors entering the electricity market, effectively safeguarding Kenya Power's customer base.

The regulations specify that existing Kenya Power customers cannot enter into agreements with other distributors, essentially protecting the utility firm from mass customer defections. Furthermore, there is no specified transition period for customers to switch to new distributors. With over 9.2 million homes and businesses affected, this regulation implies that customers will remain with Kenya Power for an indefinite period.

Despite this, it remains uncertain if the Energy Cabinet Secretary will amend the regulations to introduce a transition period for customers to transition to new distributors. The fear of massive customer defections due to frequent outages and high costs has been a concern. Some large consumers, including Kenya Breweries and Bamburi Cement, have already begun shifting to alternative electricity sources such as solar and biomass, highlighting the growing trend away from traditional power suppliers.

The regulations also mandate Kenya Power and the Kenya Electricity Transmission Company (Ketraco) to provide non-discriminatory open access to their transmission and distribution networks. This means that other firms can transmit electricity through these networks upon payment of wheeling charges.?

The regulations aim to increase competition in the electricity distribution sector, allowing power generators like KenGen and independent power producers (IPPs) to sell electricity to distributors other than Kenya Power, thereby encouraging market entry and innovation.?

Kenyan Government Mulls Restricting TikTok Use by Officials Amid Security Concerns

The Kenyan government is contemplating limiting the use of TikTok by government officials to safeguard sensitive data and citizens' security. Interior Cabinet Secretary, CS Prof. Kithure Kindiki, informed Parliament that the National Security Council (NSC) is addressing threats posed by social media platforms, including TikTok.

"Currently, the NSC is handling the matter of TikTok. As you know, the Interior Ministry coordinates cybersecurity programs for the country," the CS stated.

The NSC is deliberating whether to ban public officials from using TikTok to protect sensitive data, even though there is currently no policy regarding social media use by government officials. The NSC aims to limit TikTok's use due to the security risks it poses.

Kuria East MP Marwa Gitayama , chairing the meeting, expressed concerns about the absence of a government policy on TikTok and other social media platforms for individuals with critical government information. He noted that China, TikTok's origin, has banned its use, and many US states have prohibited government officers from using the app on their phones.

The CS stated that the NSC's decision on TikTok would inform the policy on limiting its use by government officials and specific age groups in Kenya.

"This matter is so complex, so consequential that it is not easy to look in one direction and decide whether to ban TikTok or not," he remarked.

The government is also engaging with TikTok regarding its processing activities and compliance with the Data Protection Act, 2019 . Failure to comply may result in the government enforcing the law through directives, orders, and requirements.

Uganda Introduces Guidelines for Digital Credit Providers

Uganda launched the comprehensive guideline for Tier 4 microfinance institutions and money lenders, marking a crucial moment for the country’s digital lending landscape. The guidelines mandate that digital credit providers can only offer financial products and services through digital platforms, emphasising transparency, fairness, and compliance with all regulations in their dealings with consumers.?

Applicants seeking to operate as digital credit providers must undergo a thorough assessment by the Uganda Microfinance Regulatory Authority (UMRA) , covering aspects such as their history, governance structure, financial sources, and compliance with systems and policies. Failure to comply with the guidelines may result in the suspension or revocation of the licence, highlighting the importance of adherence to terms and conditions, full disclosure to consumers, and proper governance and risk management practices.

Kenya's CMA allows electronic IPOs in drive to cut costs and end listing drought

The Capital Markets Authority (CMA) has opened a window for new firms to list shares on the Nairobi Securities Exchange through an electronic process. This move aims to reduce the time and cost of initial public offerings for issuers and protect investors from refund errors. However, CMA has tightened rules for electronic initial public offerings (IPOs) through legal notice No. 170 ? to ensure fair and equitable allocation of shares to investors and prevent the recurrence of trading malpractices that have in the past hurt investors in the Kenyan capital markets.?

Electronic IPOs give firms the opportunity to conduct IPOs on the internet or in other electronic or automated means or media, wholly or partially, where investors subscribe to the offer of securities by submitting applications electronically, and the applications and allotments are processed and completed electronically.

Other Tech News

Ethiopian Bank Loses $40 million Due to Technical Glitch

The Commercial Bank of Ethiopia, established 82 years ago, serving over 38 million account holders, is struggling to recoup millions of dollars after a weekend glitch allowed customers to withdraw unlimited funds, according to local media reports. More than $40 million was reportedly withdrawn from the state-owned bank or transferred to other banks as customers discovered they could withdraw more than their total balance. Transactions were halted several hours later.?

Local media reported that long lines formed at cash machines across Ethiopia after the problem was discovered, with people waiting for hours to make withdrawals totaling millions. The news of the technical glitch was spread on social media mainly by university students, who withdrew much of the money, said the bank’s CEO, Abe Sano.?

A local newspaper reported that $42 million (Ksh. 5.6 billion) was lost. Ethiopia's central bank, which oversees its financial sector, said in a statement that the interruption was a result of system security checks and "not an incident that endangers the bank, its customers, and the entire financial system."

KRA(KENYA REVENUE AUTHORITY) electronic tax invoice management system data privacy concerns

The Kenya Revenue Authority (KRA) has reassured the public that taxpayers' data in its electronic tax invoice management system (eTims) is secure, dismissing concerns about potential compromise of sensitive personal information. The agency's statement follows public feedback and criticism, including from the Kenya Medical Association (KMA), which recently raised concerns about the forced disclosure of patients' data. KMA had issued a seven-day ultimatum to suspend the tax payment system in the medical sector or face a nationwide strike.

As reported by Business Daily , the tax authority stated,?

"The details captured in the invoices are transaction details that are normally included in any invoice or receipt issued to a customer and need not include confidential information of taxpayers."?

The Kenya Revenue Authority (KRA) emphasised that it upholds the confidentiality of all information transmitted in accordance with the provisions of the Tax Procedures Act, 2015.

TikTok's Growing Popularity as a Search Engine

In a parallel development, TikTok is emerging as a competitor to Google as a search engine, especially among the younger generation. According to a report by Adobe , 64% of Generation Z individuals have used TikTok as a search engine. Business owners are also capitalising on TikTok's popularity, with 54% using it to promote their businesses.

The platform's appeal lies in its short, informative videos and personalised content, which users find more engaging and current. However, businesses face challenges in converting TikTok engagement into sales and appealing to a diverse user base.

Despite these challenges, business owners are investing in TikTok content creation, allocating an average of 15% of their marketing budget for this purpose. TikTok's new data-sharing feature, PrivacyGo, is also gaining traction among business owners, with 49% indicating they would use it to match their CRM information with TikTok's audience insights in a privacy-protective way.

Ghana is having a Starlink rethink

Ghana's National Communication Authority is considering granting Starlink approval to operate in the country following severe subsea cable cuts that have disrupted internet connectivity. The outages have affected businesses and led to changes in the country's stock exchange hours. While the regulator estimated a five-week repair time for the cable cuts, Starlink's potential approval could provide relief. Starlink is expected to launch its services in Ghana by Q3 2024, initially focusing on high-end customers.

Nigeria, Egypt among world’s 10 fastest-growing countries for software developers

According to GitHub , Nigeria and Egypt stand out among the world's top 10 fastest-growing countries for software development in 2023.? Nigeria recorded a remarkable 45.6% increase in developer talent numbers, reaching 872,162, while Egypt saw a 34.1% rise to 729,790 developers. African startups are driving this growth, employing over half of the local developers, while foreign companies outside the continent hire the remaining 38%, as per a Google report.

Kenyan Digital Commerce Start-Up, Tappi, Expands To C?te D'Ivoire

Kenyan digital commerce start-up tappi announced its expansion to C?te d'Ivoire, its third African market after Nigeria. The end-to-end commerce software-as-a-service (SaaS) solution targets micro, small, and medium-sized businesses (MSMEs) in Africa. The start-up said C?te d'Ivoire’s MSMEs will receive access to its SaaS and enterprise-grade tools from $8 (Ksh.1,064) a month.?

Through Tappi’s partnership with MTN, the telecom’s 17 million customers in C?te d'Ivoire will also be able to access these services via integrated data bundles. Tappi says it has so far captured verified reviews on over $3 million in consumer transactions and engaged with over 150,000 consumers.

Global News

Apple Smartphone Market Monopoly Lawsuit

Apple faces a major legal challenge as the Department of Justice , along with 15 states and the District of Columbia, filed a lawsuit accusing the tech giant of monopolistic practices. The 88-page lawsuit alleges that Apple has abused its power to stifle competition and maintain its dominance in the market.

Central to the lawsuit is the claim that Apple has restricted access to its hardware and software, particularly in its iPhones, effectively limiting consumer choice and driving up prices. The government argues that Apple has designed features like iMessage and Apple Pay to lock users into its ecosystem, preventing them from easily switching to competitors' products.

The Justice Department also alleges that Apple's contract restrictions on developers have stifled innovation, keeping new ideas and products within its ecosystem. This, the government argues, allows Apple to extract more money from consumers and businesses alike.

The lawsuit further claims that Apple has used its influence to suppress innovation in areas such as super apps, cross-platform messaging apps, digital wallets, streaming services for video games, and non-Apple smartwatches.

In response to the lawsuit, Apple has defended its practices, stating that its restrictions are in place to protect user privacy and security. A company spokesperson emphasised that the lawsuit threatens Apple's ability to innovate and create products that meet consumer expectations.

Apple has vowed to vigorously defend itself against the lawsuit, signalling a potentially lengthy legal battle ahead. The company reportedly held multiple meetings with Justice Department officials prior to the lawsuit but declined to comment on any potential settlement negotiations.

The lawsuit against Apple marks a significant development in the ongoing debate over Big Tech's dominance and its impact on competition. If successful, the lawsuit could lead to major changes in how Apple and other tech giants operate, particularly in terms of how they manage their ecosystems and interact with developers.

The outcome of the lawsuit could set a precedent for future antitrust actions against Big Tech companies, potentially opening the door for more regulatory scrutiny and enforcement. This could have a ripple effect across the tech industry, influencing how companies design their products and services and how they compete in the market.

For Apple specifically, a ruling against the company could force it to change its business practices, potentially opening up its ecosystem to more competition and innovation. This could lead to a more dynamic and competitive tech ecosystem, benefiting consumers and smaller developers.

The outcome of the case could have far-reaching implications for the tech industry as a whole, shaping the future of competition and regulation in the digital economy.

Google fined €250m for breaching intellectual property deal

Google has been fined €250m (￡213m) by French regulators for breaching an agreement over paying media companies for reproducing their content online. France’s competition watchdog said on Wednesday that it was fining the US tech company for breaches linked to intellectual property rules related to news media publishers. The regulator also cited concerns about Google’s AI service.?

The competition authority said Google’s AI-powered chatbot Bard, since rebranded as Gemini, was trained on content from publishers and news agencies without notifying them. The watchdog said in a statement that the fine was for “failing to respect commitments made in 2022” and accused Google of not negotiating in “good faith” with news publishers on how much to compensate them for the use of their content.

About us

The Lawyers Hub is an organization based in Kenya working at the confluence of Law, Policy, and Technology. We run capacity-building initiatives on data protection, AI policy and regulation, justice innovation, and the impacts of tech regulation on the African continent, all under the Africa Digital Policy Institute umbrella. We also offer technical legal support to innovators and startups through the Africa Startup Law Accelerator. Additionally, we convene weekly policy discussions and bring together digital policy and technology actors annually at the Africa Law Tech Festival in July. Every December we convene judicial actors during the Africa Legal Innovation Week. The Lawyers Hub is also the publisher of the Africa Journal on Law & Tech. Our thematic focus areas include AI and Data Governance, Digital Platforms and Infrastructure Regulation, Intellectual Property, Internet Governance, Justice-Tech, and Digital Democracy.Learn more about who we are and what we do.

www.lawyershub.org

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