It’s happening: the EU has announced #VATMOSS reforms

UK policy

Today the European Commission has announced a raft of proposed reforms to the VATMOSS system, the e-commerce reform meant to target tax-dodging multinationals which instead had a devastating effect on SMEs, microbusinesses, and the digital industries.

It’s just over two years since that awful hashtag entered our lives and our businesses. Thousands upon thousands of words, hundreds of blog posts, and dozens of in-person meetings have taken place since then to try to get some changes made to this awful situation we never asked for. And now here they are.

We simply cannot thank the EU VAT Action campaign enough. These unpaid volunteers have lobbied for these changes on their own time, often at the cost of their own businesses and well-being.

Praising the work of the EU VAT Action campaign comes in the context of other groups and individuals who feigned an interest in helping, but were only ever in it for themselves chasing glory, PR, or their own political agendas. They contributed nothing. They know who they are.

Thresholds

  1. There will be a threshold of €10,000 in online sales per annum before cross-border taxation rules apply. Businesses trading under that threshold will be able to apply domestic VAT rules.
  2. SMEs which make less than €100,000 in cross-border sales in e-services per annum will no longer be required to provide two pieces of evidence to prove the place of supply. The EC now says that one piece of evidence will suffice for traders of e-services.

table showing tax threshold requirements

We knew there would be some contention over what the proposed threshold would be. In their press release today, the EC has said:

“The Commission has sought to strike the right balance between reducing burdens for small business while ensuring that the threshold did not create distortions to the Single Market arising from differences in VAT rates. A threshold that was set too high could also have a distortive effect. Setting the threshold at €10 000 will give a boost to 430 000 businesses across the EU representing 97% of all micro-businesses trading cross-border. At the same time, 6 500 of the smallest companies selling e-services through the One Stop Shop system will be relieved from VAT obligations in other Member States.”

The taxman

  1. Microbusinesses will be allowed to use domestic VAT rules on invoicing requirements and record keeping. The silly requirement to retain all MOSS-applicable sales records and customer data for 10 years is on the way out.
  2. The first point of contact for queries will always be the tax administration where the seller is located. Sellers will no longer be audited by member states where they have made sales. This presumably means no more idiotic letters from Luxembourg over 5p discrepancies.

Expansion

MOSS – or rather, the application of VAT based on the place of supply rather than the place of sale – is being extended to cross-border sales of physical goods, as was intended from day one.

When will these proposals take effect?

We are not out of the woods yet. The proposed thresholds may be applied in 2018 on e‑services, and 2021 for online goods. Until then, you are obliged to carry on collecting the multiple data points to determine the place of supply.

The fine print

The announcement was accompanied by four legal documents which form the actual proposal, including the impact assessments. Never skip these documents. It’s where the really fascinating details are hidden.

A few items of note within them:

  • The introduction of the €10k threshold is anticipated to take 6,500 businesses out of the MOSS system, leading to a potential cost saving of €13 million. The threshold is also anticipated to benefit 430,000 businesses across Europe.
  • The €100k threshold before the requirement to supply two pieces of evidence kicks in is anticipated to benefit 1000 businesses.
  • The €10k threshold will be optional. Businesses which suspect their sales may go above that in any given year will still be permitted to participate in the system while still under the threshold.
  • The 10 year record retention period has been acknowledged as one which “largely exceeds the record keeping requirements of most Member States.”
  • In response to feedback that it is very difficult for sellers to collect all the data they need within filing deadlines, the deadline may be extended from 20 to 30 days following the end of the tax period.
  • The EC also wants sellers to be allowed to correct previous VAT returns “in a subsequent return instead of in the returns of the tax periods to which the corrections relate.”
  • The EC mulled over six different policy options with various combinations of thresholds and simplifications. Each one was explored in detail. It almost feels like they were sent back to their rooms with a lot of homework.
  • 95% of all reported issues with MOSS came from the UK.
  • The average MOSS compliance cost for European businesses is €2,172.
  • Germany and the UK hold 43% of all MOSS registrations across Europe.
  • Way more interesting: Luxembourg submits 55% of all MOSS revenues, and Ireland 15%. The two countries with the most “tax issues” (ahem).
  • 0.1% of all MOSS revenue has come from returns with a declared turnover of under €10k.

VATMOSS and Brexit

The proposed rule which would permit domestic VAT rules to apply to traders under the €10,000 threshold would effectively remove all UK microbusinesses – the ones who were forced to register for VAT solely to comply with VATMOSS requirements – from further VAT obligations.

However, that simplification is not proposed to come into effect until 2018.

UK traders continuing to sell into Europe after Brexit will be required to register as a non-union member, no different from, say, an Australian or American trader.

For more on why Brexit is in fact the worst thing that could have happened where VATMOSS is concerned, visit the EU VAT Action campaign’s update page.

Case closed: how we exposed a fake web industry regulator

Professionalism
Summary
  • A private for-profit business, the IWDRO, has aggressively solicited membership signups on the false claim of being the official regulator of the unregulated web design and development industries.
  • The IWDRO does not, and never has, engaged in any of the professional or political activities associated with a regulator, an industry body, or a trade organisation.
  • The IWDRO has solicited further payments from members though a questionable lead generation scheme. Evidence suggests many “leads” did not exist, and those which did were of low quality and/or far below the advertised value.
  • In contrast to its claims of transparency and professionalism, the IWDRO appears to be staffed by an individual or individuals using multiple false identities and job titles.
  • The IWDRO company secretary is a partner at a commercial law firm, Excello Law, which has openly endorsed and promoted its partnership with IWDRO. IWDRO is registered at Excello Law’s address. Until alerted to the nature of IWDRO’s false claims by this writer, Excello Law’s logo appeared on every web page and marketing communication which IWDRO issued.

Profession: Profession is a term that can only correctly be applied to certain learned or chartered callings: the law, medicine, the civil service, teaching, accountancy for example. Other callings, such as journalism, are trades. – Telegraph style guide

I ruffled a few feathers (who me?) when I said that there is no such thing as the web profession, and by extension, there is no such thing as the web professional.

I meant it literally.

Web design and development are trades which are open to anyone. There are no formal qualifications required, no fixed curriculum, and no accreditation processes. These low barriers to entry mean that the web industry remains loose, flexible, and unorganised.

That lack of organisation is also our industry’s greatest flaw. At a time of potentially catastrophic regulatory change, our industry is completely absent from the political processes which govern our trade. Nor are we speaking up as an industry to defend colleagues at risk of deportation after decades of legal residence.

There is another consequence of our stubborn refusal to organise as a profession.

For some, the web industry’s lack of professional organisation is an opportunity ripe for exploitation.

As I have noted in the past, anyone can buy a domain, set up a web site, use mildly controlling language, and claim – through that web presence alone – to possess some kind of authority over the web industry. At best, these web sites are harmless moneyspinners. At worst, these web sites can stray on the wrong side of the law.

We now have evidence of a faux industry body that hasn’t just strayed on the wrong side of the law, but has barreled through it with a juggernaut.

IWDRO: fake industry body, fake claims, fake clients

Today Darren at the Smallbizgeek blog has published the results of an investigation he has conducted for several months into a for-profit business soliciting web designers and developers into membership of a lead generation scheme. There is strong evidence that many of the “leads” are in fact what jobseekers know as ‘fishing vacancies’: fake opportunities posted to the site to get people registered. As you will see, the dozens of members he spoke with – some of whom were all but harassed into joining the scheme – have gained nothing from their membership dues other than the cynicism borne of a lesson learnt.

Where this got interesting from the legal perspective is that the business running the scheme has been openly claiming to be the official industry regulator of the web design and development professions within the UK.

This was not said as a slip of the tongue in a sales pitch. This was their core marketing strategy.

Screen cap of YouTube video where the organisation openly claims to be the UK's only regulator of the web industry
But don’t take it from me. Take it from Patrician In A Suit.

This video was on YouTube. They pulled it on 18 November after Darren’s blog post went live. I knew they were going to pull it, so I downloaded and saved it in advance. Here it is.

(Technically, downloading a YouTube video is not legal, if the pot would like to accuse me of making tea with my black kettle.)

(That’s the very model of industry diversity saying “Welcome to the Internet Web Site and Development Regulatory Office. The IWDRO is THE regulatory office governing internet based commerce and associated industry services.” [As we say in Glasgow, are you f**k.] “The IWDRO work with companies and consumers in a regulatory capacity to provide accreditation for those companies who meet standards within the industry and are committed to working toward a code of conduct that ensures good and ethical practices.” [No you don’t.] )

Who is this guy? He’s not connected to the company. I know this because, bizarrely, I happened to spot him in an advert for Haribo. It’s an actor.

Outside the lead generation scheme, this for-profit business does not carry out any of the activities you would associate with a regulator, such as accreditation and recertification. (What sort of accreditation could they possibly do? Validate your code?)

Their organisational values page, which claims “we operate in a transparent and consistent manner with professionalism as a priority” and “we make certain that all internal and external communications are accountable, consistent, timely and transparent”, is playground guff, not a statement of legally binding regulatory obligations.

They do have a membership Code of Conduct which, considering their own behavior, reads as a bit of a piss-take.

2016-11-17_135616

Another difference between this outfit and a legitimate regulator is that the business does not act as an advocate, as legitimate industry bodies do, within the legislative and political spheres. Unlike these groups, they are not travelling around the UK soliciting members’ input on digital and Brexit to feed up to Parliament and the Department for Exiting the EU. In a year of political upheaval for the digital industries, their social media accounts remain entirely self-promotional.

Screen cap from the IWDRO web site as of 9 AM on 17 November (after this article was published) showing their claim to be “the Regulatory Office governing internet based commerce, both in the UK and world-wide.”

Screen cap from the IWDRO web site as of 9 AM on 17 November (after this post was published) showing their claim to be “the only Regulatory Office governing suppliers of internet based commerce.”

What is remarkable is that this faux industry body has been exposed before. This post is the second search engine result for them. If that post is to be believed, this business is being run by an individual or individuals using multiple false identities. Yet rather than taking the hint, as is clear from the comments there and in Darren’s research, they have actually escalated. So much for operating in a transparent manner with professionalism as a priority.

There can be no other conclusion. Whatever this company’s true motivations are, they are using the term “regulator” to frighten aspiring digital workers into handing over their money.

It is as crass and shameful as that.

Who are these people?

So just who is behind the “UK’s only official regulator”? Is there anything in their personal or professional backgrounds which qualify them for a position of such weighty responsibility? What skills and values to they bring to the table? What inspired them to claim a position of authority over thee and me?

To answer these questions – due diligence, if you will – let’s take a look at IWDRO’s publicly available company records. What you’ll find will, as with everything connected to this shady operation, raise more questions than answers.

According to IWDRO’s Companies House filings, IWDRO is a private company limited by shares. There are 100 shares. 10 are held by Director One, and 90 shares are held by Director Two.

The company is registered under Standard Industrial Classification Code 84130, “regulation of and contribution to more efficient operation of businesses”, which certainly appears to be a corner of this woefully outdated taxonomy system which is ripe for abuse.

Looking again at the Companies House filings, we learn the company is a three man band: one Director (one), one Commercial Lawyer (two), and one Solicitor (three).

Director One: Simon/Chris/Chris/Chris

Olly has covered the identity of Director One in detail, including the suspicious crossover in ownership with a web design agency. (A cynic might suggest that the “lead generation” scheme’s main beneficiary is in fact the web design business he owns.) A comment on that post from someone approached by IWDRO, who then did some digging, says they discovered four different LinkedIn profiles using the same photo. These names have cropped up before in discussions about this organisation.

So right off the bat we have questions and problems that go way beyond professional qualifications for leadership. We don’t even know if we are dealing with one individual, two, three, four, or one individual and three sock puppets.

It gets worse.

Meet our other two “regulators”.

Director Two: International Man of Mystery

Our second IWDRO director is Barry. We know he’s 61, a Commercial Lawyer, British, and living in Malaysia. We also know he is the Majority Shareholder, a topic he’s rather prickly about.

That is all we know about him. And this is the damndest thing.

Do a search for him yourself. There is no footprint for him outside IWDRO. Nothing. No LinkedIn profile, no CV, no page on any law firm’s web site, no potted history of any background he might have in tech and web, no conference talks, no Github page (you see my point)…nothing.

This man does not exist outside IWDRO.

This is important. We need to know what these men think they have which qualifies them to have started a for-profit business claiming regulatory authority over your work and mine.

What we have so far is two directors who don’t just lack any moral or professional qualifications for leadership in a changing industry – we’re struggling to establish whether they exist at all or whether they are sock puppets or fake identities.

All we know of dear Barry is that in April of this year he sent this letter to Olly, who wrote the first blog post exposing IWDRO’s lead generation scam. It’s a legally bunk Cease and Desist order not worth the PDF it was printed on. (As it is, it was printed on Excello Law letterhead.) In the letter Barry repeats the claim – as a commercial lawyer, on a law firm’s letterhead – that “IWDRO is a reputable business, providing services to its members, which it regulates” (emphasis mine). It’s rather telling that Olly’s reply back to the legally invalid cease & desist letter generated no response.

Barry signed the letter “Director and Majority Shareholder”. That’s how he sees himself – not as a regulator, not as a leader, not as the shepherd of a scattered flock. Majority shareholder.

We would love to ask Barry to offer a statement to the contrary, but we have no way of contacting him. His contact information is given as c/o Excello Law. And again, he does not exist – not an email address, not a contact page on a law firm’s site, nothing – outside IWDRO’s company filings.

The Companies House filing lists him as “Commercial Lawyer”, however, he is not a registered solicitor in England or Wales, where IWDRO is registered, nor Malaysia, where he lives.

Whoever Barry is, or rather, if he even exists, there’s only one thing we can say for sure. This company exists solely to make it rain for him, and he would have gotten away with it if it wasn’t for you meddling kids.

Director Three, Tom: Solicitor/company secretary/narcissist

Everyone, meet Tom. Tom, meet an industry which would like to have a word or two with you.

Tom appears in this advertorial promoting the IWDRO which appeared on page 12, issue 239 of Web Designer Magazine. This was published sometime in 2015. Click to view full size.

2016-11-21_095335

Tom Sutcliffe is a partner at Excello Law. For what it’s worth, his background is sport, not tech. There are, believe it or not, quite a few tech-savvy solicitors – meaning lawyers who code, program, hack, develop, and encrypt – which more than qualifies them to advise on the everyday business issues facing designers and developers. He is not one of them.

According to the Web Designer advertorial, Tom is also keen on “supporting professional and ethical business”, so surely he won’t mind this little bit of transparency and due diligence.

You see, Tom Sutcliffe has been the IWDRO’s company secretary since January 2013.

He is also the owner of the IWDRO domain. I have never had a client ask me to use their lawyer for any of their domain contacts. He is the registrar, administrative, and technical contact.

In the advertorial he extols the virtues of the organisation. This was not the first time he did. Until last week, a professionally produced video of him at his previous law firm was available on YouTube and Vimeo. It has now been deleted. In the video he (the company secretary, a commercial lawyer), sitting in front of a shelf of self-nominated vanity awards, did the same sort of promotional spiel in support of the IWDRO despite the howling false claim in the company’s very name. If he was involved with IWDRO before he moved to Excello Law in late 2014, does that suggest that he brought the IWDRO with him?

This advertorial, really, is all about how the IWDRO idea works out really well for them. Now, you could ask why someone with a vested interest in the company is in the advertorial, as opposed to an actual designer or developer, or indeed, a happy IWDRO member. It’s not the only question you should be asking.

In the advertorial, which reeks of someone interviewing themselves with their own questions, there is this exchange:

Q. The IWDRO recently teamed up with Excello Law, business and commercial solicitors. How did you get involved with them?

A. The IWDRO engaged one of Excello’s commercial lawyers to assist with the legal issues arising when the concept was born a couple of years ago. The value added by this relationship went way beyond the provision of legal services and it became apparent that a good commercial lawyer thinks differently, and complements, an organisation with objectives like the IWDRO’s…

*sound clip of a record scratching*

Whoa whoa whoa hold on just a sec.

You do realise he’s talking about himself here?

He is the commercial lawyer who was engaged when the concept was born. He is the good commercial lawyer who thinks differently.

Darren and I put ourselves at legal risk to bring this story to you, but let me tell you this: we’re doing so because of people who have the chutzpah to kiss their own arses in the third person.

Kissing their own arses in the context of promoting a private for-profit company taking the industry I love for a ride.

Kissing their own arses while falsely claiming regulatory authority over an unregulated trade.

Kissing their own arses over their business idea that’s so brilliant it’s five figures in the red.

Click for source document

For what it’s worth, I was a company director once, very briefly, at a local social enterprise. I left after a matter of months when it became clear that the company was not what I had been told it was. All the promises about community development this and social inclusion that were a load of crap: it was one man’s vanity vehicle, a device to grab money and status within the Scottish third sector elite, and we directors were expected to rubber-stamp his narcissism. I smelled shite, called bullshit, and left.

What I didn’t do was facilitate some legal fudges in the business’s name, double down my efforts to expand the false representation, and stick my own face into their print ads.

Call that my code of conduct. But I am not a lawyer…

Back in Excello’s swish office in Liverpool – which is, of course, the IWDRO’s registered address – the advertorial was accompanied by a 50% discount on membership. What a desperate price cut on an allegedly essential service.

So there we have it. IWDRO is three men:

1. Someone who may be using sock puppets;
2. A greedy fake lawyer;
3. Someone who likes looking at awards and pictures of himself.

Ladies and gentlemen, your “official industry regulators.”

What the law says

I would encourage you to read Darren’s post and share it within your networks. From the legal perspective, pay attention to these sections within it:

The web profession has no official regulator.

No one, repeat no one, can claim regulatory authority over an unregulated trade. The web design and development industries are so immature (literally – we were only born in the 1990s) that we have yet to establish an industry body or trade organisation, much less create barriers to entry requiring regulatory approval for those working in the field.

“Regulator” is supposed to mean something.

Regulators have authority vested in them by a profession – and remember, the web industry is not a profession – which they receive in exchange for providing professionals with accreditation and the right to work. A legitimate regulator can remove someone from an industry and ban them from ever working in it again. No one can ban you from working in web development. The worst that this business can do is kick you out of their own club without refunding your membership fee.

Posing as a “regulator” is illegal under UK company law.

This company pastes a law firm’s logo into their header and onto every conceivable communication. There is no excuse for not knowing that posing as a regulator is illegal under UK company law, and there can be no other conclusion regarding their motives for promoting themselves as one. Who exactly appointed and approved them as 1) the UK’s 2) only 3) official 4) regulator? Absolutely no one. This goes way beyond pedestrian false advertising.

The use of the phrases “regulator” or “regulatory”

As this organisation’s possibly fake Malaysian lawyer well knows, “regulator” and “regulatory” are protected terms. You cannot just use them in a business’s name. The post provides screen grab evidence suggesting that this business knows they are using these terms unethically as well as illegally.

A Regulator Selling Job Leads?

Can you imagine, for example, the Royal College of Physicians and Surgeons getting member GPs to pay them additional fees to bid for private sector contracts? An industry regulator selling job leads would create a situation where professionals could lose accreditation for failing to play the bidding game. Absolutely not.

So… Is There a Legitimate Web Dev Association?
No, and there is no excuse for that either. But that is our own fault, and no one else’s.

What can members do?

Some members will have joined this faux industry body thinking that being approved by an “official regulator” offered some sort of protection for their own business. Please be aware that if you have joined this or any other fake industry body making misleading claims in order to get the proverbial membership badge, you yourself are now engaging in false advertising. You should remove all links to them.

Do be aware, as you will read in Darren’s post, that this business does not remove the logos and listings of expired members from their roster, meaning you will continue to be affiliated with this group despite quitting your membership. In fact, if you want your listing removed, you have to pay to renew your membership.

But what of formal sanctions? That is up to you. Don’t feel ashamed to come forward. Nothing can happen to them unless you take action, so please report them to the authorities detailed at the bottom of Darren’s post.

Part of the ugly and difficult process of growing up as an industry is calling out those who would do it harm. For that reason I would like to personally thank Darren for the months of research he has put into making a real difference in his industry.

Now get reading, and get angry.

Postscript: Excello Law’s response

On 17 November I emailed Excello Law (the letter is in the comments). I wanted to know what they knew, when they knew it, and how it was even possible that a reputable commercial law firm could endorse a two-bit fake regulatory scam.

When Excello Law’s reply appeared in my inbox I was expecting a missive of arse-covering legalese or even a threat against myself. What I got was this.

2016-11-18_165139

 

As a result of that investigation, Excello Law’s logo disappeared from IWDRO’s company’s header.

2016-11-18_084538 2016-11-18_084625

I wrote back:

Thank you for your prompt attention to this matter.

However, I note that as of 9:08 AM on 21 November, the Excello Law logo still appears on the IWDRO’s “Iapproved” web site: http://iapproved.org/ which invites businesses to submit leads.

Lower down on the page is a testimonial from an alleged IWDRO customer. This has been identified (http://www.smallbizgeek.co.uk/proclaimed-web-industry-regulator-sells-low-quality-business-leads/#comment-285) as a false testimonial, in violation of the Consumer Protection from Unfair Trading Regulations 2008, and the “customer” has been identified as a stock photo.

In other words, Excello Law’s endorsement appears above yet another double violation of business law (the false testimonial and the illegal use of the word “regulator” in IWDRO’s name, clearly visible in the footer).

In the link above you will also see that IWDRO actively discussed their partnership with Excello Law in the context of false claims about negotiations with four different governments to recognise their “regulatory authority.”

We wish you the best of luck on your investigation today.

In the meantime we remain perplexed as to how the word “Regulatory” in IWDRO’s name did not catch the attention of a commercial law firm which has no excuse for not knowing better.

On 22 November I received a second email from Excello Law:

Obviously we can’t expect Excello to disclose what they discovered in their internal investigation, nor is their any point in asking.

However, it’s clear from those two letters that I hit a nerve.

I simply cannot imagine how it is possible that Excello Law was unaware of IWDRO’s claims and activities until I took the time to alert them. It is an incredible failure of due diligence if they genuinely had no clue.

On the other hand, if they were aware, it is something else entirely.

Postscript: the lies have stopped

As of December, thanks to Darren’s investigation, the IWDRO has redesigned their web site and seemingly repackaged their service operation.

They are now – wait for it – yet another garden variety pay-per-inclusion directory.

Yet another attempt to sell aspiring industry workers the notion of paying for exclusivity and validation.

Yet another sad and self-serving moneyspinner.

You could ask yourself Really? Is this all they’ve got? 

Then again, they never had anything to begin with. Banal Chamber of Commerce-style backslapping is all they are capable of achieving. Not representation, not advocacy, not professional development. You get a certificate on the wall and a pat on the head. Anyone thick enough to pay for that frankly deserves it.

The important thing is that all notions and claims of being a regulator – either the UK, worldwide, official, only, or otherwise – have been removed from the web site, as have all publicly visible links to Excello Law.

Additionally, IWDRO’s Facebook page has been deleted. Excello Law’s logo, however, remains in the header of IWDRO’s Twitter profile.

But has anything actually changed? Of course not. Their name, IWDRO, remains the same. An abbreviation of Internet Web Site Regulatory Office, a fudge which allows them to claim “we don’t have ‘regulator’ in our name” with a straight face. Their company officers, including the Excello Law solicitor and Barry the international man of mystery, remain in post. The lead generation machine roars on. They remain heavily in debt.

I will be keeping an eye on them and so can you.

In the meantime we still need members who joined the faux regulator based on the company’s false claims to report them to Action Fraud. You should be looking to get your money back. Members taken in by the notion of the partnership with Excello Law should also report the latter to the Legal Ombudsman.

This was not a victory

Getting these sleazy fake regulators to shut their greedy mouths may feel like a quick win.

However, the fact remains that our industry has never been more at risk than it is today.

Designers and developers are in the middle of a perfect storm of poorly drafted digital legislation, opaque political processes, and uninformed external attacks. We can now throw reactionary, racist, and authoritarian political currents on top of that.

More than ever, we need to come together as an industry and face these problems head-on. We need real organisations, real leadership, and real advocacy. We need people who are going to roll their sleeves up, get out from behind their keyboards, and strain every sinew to keep our industry alive.

What we don’t need is to have our time wasted by cowards hiding behind lies, shiny dashboards, and vanity awards.

We’ve got work to do.

How to make a success of Brexit: the House of Lords talks digital and tech

Brexit / UK policy
For more on Brexit and tech policy, visit my dedicated side blog at https://afterbrexit.tech.

A Parliamentary hearing into Brexit’s impact on the organised digital professions provided valuable lessons for the unorganised web industry to follow.

The House of Lords’ EU Internal Market sub-committee has been holding a series of public hearings as part of their ongoing inquiry into Brexit’s impact on future trade between the UK and EU in goods.

One particularly fascinating hearing took place on 20 October and featured testimony from representatives of three digital and tech industry bodies:

The issues they covered included

  • The undercounting and miscounting of the digital sector in the UK’s absurdly outdated economic taxonomies (previous rants are available)
  • The future of the UK within the EU Digital Single Market strategy, including the possibility that the DSM could be used against the UK after Brexit
  • Data protection, including data flows, post-EU adequacy certifications, and interim arrangements
  • How Brexit removes the UK from some European technical standards agreements
  • How an inadequate regard for data protection and privacy could expose the UK to European legal risk after Brexit
  • Migration, freedom of movement, and skilled labour, including talent and leadership
  • The possibility of continuing to trade in the EU market with on a WTO-style basis
  • What the government should take to the Brexit negotiations from the digital industries

Typically, the hearing was the one Parliamentary session from that day not transcribed to Hansard. Because of that I have had to transcribe it myself. (I do have a life. Really, I do.) I have not transcribed the entire session, nor have I entered a verbatim record of the testimony. Rather, I have focused on the areas most relevant to digital agencies and web professionals. I have also added links to references I thought might be helpful.

If you want a full and faithful record, you can watch the full video of the testimony here.

To read the full testimony, scroll down. It is long.

This is not denial

Over and above the testimony itself there were three key points made during the hearing.

First, Antony Walker from TechUK told the committee “Businesses across the board fully accept the outcome of the referendum.” This is not merely stating the obvious. This is retorting the Government’s current public relations strategy on the Brexit negotiations.

I have watched both of the Secretary of State for Exiting the EU’s full statements to the House of Commons so far (last week’s statement here). His “statements” are neither statements nor are they constructive exchanges. Both have been vapid displays of mockery, sneering, and denigration. When MPs ask for clarity, they are accused of not respecting the outcome of the referendum. They are accused of trying to sabotage Brexit. They are accused of being in denial. They are accused of seeking to “undermine the decision of the British people.”

That is bullshit, and the Secretary of State for Exiting the EU knows it. It’s a stalling tactic to gloss over the unavoidable fact that the UK government has no clue, has no direction, and has no strategy.

By reminding Parliament that his trade body’s members fully accept the outcome of the referendum, as Antony Walker did, the bombast and bluster from the Secretary of State is more clearly visible for what it is.

Put up or shut up…

The second and third takeaways pertain to what I have been saying for quite a while regarding professional organisation, or the lack of it, within the web industry.

In one exchange, Jo Twist from UKIE told the Committee about her members’ concerns on freedom of movement and migration. A member of the Committee replied: “And you are making those representations to the Department for Exiting the EU?”

This is important. Representing her industry’s position in a conversational committee is one thing. Submitting those opinions into the only process that actually matters – the negotiations that the Department for Existing the EU will be carrying out over the next few years – is quite another. The Committee member was reminding all of us that if we are not formally conveying our industries’ needs to that department, in the way the department wants, through the process the department wants, we are not conveying our needs at all.

…then grow up

In another exchange, after being asked what her members want to see in future, she replied “we’re about to engage on a nationwide tour to meet with our members to dig into these issues.”

Because guess what? That’s what organised industries pay their representatives to do. It’s her job to get out from behind a computer, physically go to her members’ offices, engage with them, and feed their needs directly up to government through the recognised voice of an organised trade body. The gaming industry is smart enough to know that.

We’re not. Without an organised industry body, the makers of the web will continue to vent their spleens about Brexit, and the laws and policies that will shape the future of our work, through tweets, rants and memes read only by like-minded individuals in our cosy little echo chambers.

Look where that’s gotten us this week.

Partial transcript, House of Lords inquiry into Brexit and digital, 20 October 2016

Committee: What are the impacts of Brexit on your sectors? To what extent, in terms of trade policy, are tariffs an issue, given the interaction between services and goods? Does the recent information technology agreement stuck at the WTO, attempting to eliminate tariffs on 200 IT products, change the benefits of being inside the EU single market, or in any way complicate a transition to an external situation? What are the non-tariff barriers that concern your sectors immediately?

Jo Twist: As far as the games industry goes we are a globally recognised, highly successful sector and a key driver of the creative industries and the digital sector, globally worth about $100bn by next year. We have a very strong consumer market, are the 6th largest global consumer market in the UK, the 2nd in Europe, consumer spend is over £4bn. The biggest homemade franchise, Grand Theft Auto, is still the fastest, biggest selling entertainment product of all time globally.

However, the size and nature of the games industry, as a digital industry, is not effectively measured or reflected in existing statistics, and I think this is an important starting point for the conversation as we look into the future. We know that the current system to understand exports in a digital world is based on SIC codes. These are not fit for purpose in a digital age. They do not reflect the true size of our industry, and DCMS and ONS fully recognise that. We took a “big data” approach to try and solve this with NESTA recently to try and solve, and launched the UK Games map, which identified over 2,000 games businesses active in the UK from Dundee to Cornwall. Most of their exports and games they are producing in a digital world are not reflected or counted. This is a problem.

For the games industry primarily our concerns are around non-tariff based trade barriers. In the creative industries you cannot have trade without people. Those highly skilled people, and the diversity of workforce, is what fuels our innovation and creativity across the DC. One of the other major trade based barriers we foresee is around the free flow of data.

Antony Walker, TechUK: Digital tech sector counts for 10% of GDP, which is the largest proportion of any advanced economy. Turnover in the sector grew 32% faster than the rest of the economy in the first half of this decade. It employs about 1 1/2 million people across the UK. The UK tech sector has the highest level of productivity of any of the UK’s sectors, and when you look at the sectors that become the most digitised, you also find high levels of productivity in those sectors.

Sir Charles Bean, in his recent report on UK economic statistics, made the very clear point that we are probably massively underreporting the size and scale of the UK tech sector within our official data. To quote him in his report, “if the digital economy was fully captured within official statistics, it could add between of 1/3rd and 2/3rds of a percentage point to the growth rate of the UK economy. That’s really significant. So the sector is big, it’s probably bigger than we think it is. It’s about the future, because the tech sector is the agent of change in a modern digital economy.

To put all of that into context, what does Brexit mean. Most digital products and services are actually services. They’re digital goods. It’s important to recognised that the single market itself, and the whole acquis that sits within the single market pillar, is actually a mechanism to reduce the number of non-tariff barriers to trade across the EU member states. So when you’re thinking about trade in services, you have to think about the totality of European law that applies to the single market. The single market was designed to do two things: to eliminate non-tariff barriers and to deliver harmonisation. Tech and digital is all about scale. A big harmonised market with low non-tariff barriers to trade is a positive thing for what is, and what we hope will be going forward.

Jo Twist: Can I just build on Anthony’s comment about the single market. For us, we have a difficulty in determining what it means now in a 21st century economy to trade in a single market, particularly what it means to digital software, online services, and games, that are sold through online platforms such as Apple Store and Steam. These are very often based outside the UK, as platforms and shop fronts, and sometimes outside EU. So where exactly is the single market, and how does that fit when we are talking about these issues?

Lord Mawson: The DSM strategy seeks to reduce the number of non-tariff barriers to trade .. While leaving both the EU and EEA would give the UK more sovereignty over the policy, diverging from EU rules could also increase the number of non-tariff barriers to trade in services that the Digital Single Market strategy was supposed to reduce. To what extent is this the case? Are there some policy areas in which we can change policy and ignore EU rules without adverse consequences for business, or are there areas in which we must align ourselves with the single market?

Antony Walker: As I said, the SM and the DSM in particular are very focused on trying to reduce barriers to cross-border trade across the EU. Actually, right now, there is a tremendous single market package that is being debated and discussed at EU level which could be very beneficial to the UK if it harmonises the market and makes it more accessible, given all the strengths the UK has in terms of our digital economy. Europe should be a very good export opportunity for the UK.

However, it’s also possible that a body of legislation is developed and proved at European level , and that opportunities could be taken to make that market less accessible to the UK once the UK exits the European Union. One of the things we’re very concerned about is that the UK, whilst still a member of the EU, continues to play a very active role in setting out that DSM package, because the risk of not doing so is that you end up with a whole set of issues that could be very problematic when trying to negotiate some sort of alternative arrangement. Generally we think DSM is a good thing. We wanted to see the UK driving the directive of the DSM. I know of tech companies across Europe that are concerned that the UK will have less influence, as they saw the UK as a very positive influence driving that agenda, but we need to be very careful that the DSM cannot be used against the interest of UK based companies in future.

Matthew Evans: The issue of divergence is of particular concern to the telecom sector, because the EU is currently consulting on proposals for a European electronic communications code, which is a reform package. That has the potential to significantly alter the rules which have allowed UK based telecoms operators to export to the EU, particularly around open market access, which has been the main facilitator for trade around electronic services into the EU. We would echo Anthony’s point that this is a key area for the UK that the government has to play a guiding role as much as possible over the next few years, as this would likely come into force across the UK from 2019. Telecoms is likely to be one of the first guinea pigs, should we choose to follow the changes Europe is making to its rules, or whether we stick within our current framework which to be fair has served the UK well in terms of delivering on competition and investment.

Baroness Noakes: Could I ask what in particular are you thinking of in terms of interests that could work against the UK?

Antony Walker: (after a brief discussion into issues around the divergence of technical standards) Data protection and the free flow of data, which is being debated at European level, could set out and require certain kinds of data and activities to be hosted within the European Union. It would mean that therefore there are services that could not be made available to the rest of the European market from here in the UK. If you wanted to attract digital businesses away from the UK and require them to locate within the EU, that would be a mechanism by which do it.

Baroness Noakes: So these things are not specific to the digital market? This is a generic point about the UK being engaged in EU lawmaking?

Antony Walker: Yes, but it happens that those are things being debated as part of the digital single market at the moment.

Jo Twist: I’d like to echo that. Our pro-business approach within EU negotiations particularly within DSM was welcomed and extremely important. Losing that voice, or that negotiations position around the table, can be damaging, particularly around data protection. We need to ensure we are balancing the consumer protection rights of citizens with the needs of growing and innovative businesses. The free flow of data is going to be increasingly important to every sector, not just the digital sectors we represent. I quote Mr Ansip, “Data has to be able to move freely across national borders. If it does not, the growth potential of our digital economy will be limited. That will affect businesses and industry as much as it will consumers, who have so much to gain from digitisation. So this is an absolutely critical point for us, and that is an example of a non-tariff trade barrier, in terms of data localisation, in terms of enforced handing over of source code if you want access to certain markets if you are outside the EU.

Baroness Noakes: We covered some of the aspects of statistics earlier, when Dr Twist covered the inadequacies of statistics, which we are aware of. What services should we be focusing on, and what are the most important forms of trade in those services? What are we talking about in the digital and telecoms sectors in terms of what we should be looking for?

Antony Walker: This is where the data lets us down. It’s hard to categorise the sector, nevermind the outputs.

I’d also make another point which complicates it a little bit, in that in this process of digitisation we’re going through on a global level of a “serviceisation” of products. A car used to be a mechanical product that was produced at the end of a manufacturing line and sold. Whereas now a car has a huge amount of computing capability within it, and we’re now in the process of connecting that to networks that are changing the nature of that product. The product is becoming a service that requires data to flow to it on a real-time basis. In terms of the IOT which is about the serviceisation of products, what we’re seeing in the digital sector is that everything is becoming a service. In the absence of really good data, that breaks down exactly what the components of trade are today, most of the outputs of the sector going forward are going to be services or have a service element. So things like data protection and the free flow of data become fundamental to enabling those services to flow across borders.

Jo Twist: Likewise with games, we’re trying to fit these things into quite old boxes now. Out of the 2000 UK companies, only 41% of which were counted within the right SIC codes, you can have small teams of 5, 10, 30 people; you can have large teams of 400 people working across the world on a game for 4 years, or 6 months.

You can either stream games, you can download games, you can have a free to play game on a mobile phone and pay for microtransactions. Essentially they are products in a digital world that have been created by people and rely on the free flow of data. Data is very much about giving the consumer a service which is constantly improving and giving them even more value for money. Data in the sense of how the games industry uses data is very innovative and it drives our ability to serve the consumer and the customer best.

Antony Walker: The Bean review was so important and it’s something we’ve been saying for the last ten years. In terms of ONS statistics, we know a lot more about jam production in the UK than we do about digital services.

Lord Aberdare: What might happen if the UK does leave the EEA on data flows between the UK and the EU? How might that impact your sectors? How important is it in that any deal we secure something around the lines of the ‘data passporting’ that Tech UK have been proposing as a part of this?

Antony Walker: Data needs to flow across borders. It effectively needs a legal basis to do that. That data is subject to various rules and regulations, and in particular, rules around data protection and privacy. There was an excellent case study of the challenges here, which was Safe Harbor in the US. The data passport that allows data to flow between the EU and the US was based around this concept, which basically says the protection afforded to this data in the US was equivalent to the protections afforded in Europe, and therefore there was a safe mechanism by which that data could flow. That Safe Harbor mechanism was challenged and found to be inadequate, which suddenly meant there was no clarity on what the right legal basis could be for data to flow between the two jurisdictions. What you saw was a very anxious time across the sector, and legislators and policymakers scrambling to find a policy solution on both sides of the Atlantic, which led to the Privacy Shield agreement. Because this happened quite recently this immediately came to the mind of the technology sector post-referendum, that something similar would probably be required between the UK and the EU in the case that the UK is outside of the EEA and the single market.

The challenge here, and one of the subtleties that was less understood in the referendum debate, was that when you are member of the EU and single market, the ECJ has no jurisdiction over security matters. Member states are able to set out their security arrangements as they see fit and appropriate. When you are outside of the EU, the ECJ does have to take account of any adequacy arrangements in terms of data protection requirements. Given that this is the moment when the UK has avowed all of its surveillance powers through the Investigatory Powers Bill, it means we have more regulation on statutes than virtually any other country. It does mean that potentially the UK could be open to challenge by European privacy campaigners, that a case could be brought to the ECJ.

We need to find a solution to that. If we don’t have some sort of adequacy arrangement, some kind of data passport, there is a real data that data can’t flow, and that means services can’t flow. That has to be a really central issue within the process of negotiations

Jo Twist: We absolutely support the proposal on data passporting that Tech UK has put forward and agree it is quite urgent that we get an adequacy declaration from the EU. Data is the lifeblood of every single sector, not just the digital sector, and will continue to be so. When we are talking about small companies in particular who have the potential to scale and potentially create the next big whatever it is, we don’t want to damage our global competitiveness and our standing as the UK has at the moment in the digital economy.

If the UK leaves the EEA we will have no existing agreement with the EU allowing businesses with operations in the UK to transfer EU citizens’ data to and from the EU, and as mentioned previously data is absolutely critical to the services we are now creating and giving consumers at a click of a button across the world.

Other non-EU countries such as Switzerland, Canada and Israel have adequacy declarations from the EU that they provide adequate data protection standards, and Norway has adequate data protection standards due to being a member of the EEA.

Lord Green: Access to skills is a priority, but of course, if we go for hard Brexit, there will be curbs on free movement as well as reduced market access and increased non-tariff barriers for UK businesses. To what extent do you think that in that scenario, the downside could be reduced by a reformed visa system which could give similar results to the present arrangements for skilled people, and how much bearing do you think it will have on London’s ability to remain the European capital of digital tech and startups in particular?

Jo Twist: This is the number one issue and concern. We can’t have any trade or trade deals unless we have the people that fuel the products, services, whatever you want to call them, in the future. We cannot have innovative creative globally successful competitive products and services unless we have a diversity of people, meaning a diversity of perspective as well as a diversity in all sorts of different meanings of people making those products.

We rely very heavily – we surveyed our sector – 74% of respondents in the games sector use or employ non-UK EU nationals to fill high skilled posts. We also know that that is between 20% and 30% of their workforce is made up of non-UK EU. They also have global talent. While we are absolutely working with government – we led the Next Gen skills campaign to get computer science on to the school curriculum. We now push forward STEAM skills so that we have that real pipeline of talent coming through our system that’s home grown – we also need to fill the gap in the short term. IT isn’t just about high skilled jobs, it’s about diversity as a whole. It’s about graduates in programming degrees, which we are not keeping up with the demand side in this country yet, but it’s about people with business skills who have the ability to lead an organisation and innovative and creative companies. That is the number one concern of the industry.

Our industry is very highly mobile in that they could just up sticks and move to Berlin. That is a real concern. Even though we are working very closely to identify the opportunities post-referendum, the companies are nervous. The existing EU nationals do not feel welcome. That is going to damage our creativity, our innovation, our economic success.

Lord Green: You are saying the same as the university sector is saying. Do you think some sort of visa deal for the highly skilled would work?

Jo Twist: The fact of the matter is that for highly skilled people, 20% to 30% of people’s staff is made up of non-UK EU, that is going to add an administrative and costly barrier, particularly to small companies who are crying out for this to scale, and they need these people to scale. Regardless of any kind of visa system it has to be friction free, cheap, and quick. We are talking about really fast moving companies who will be disadvantaged competitively globally.

Antony Walker: If you want to be a global hub for tech, you have to be a global hub for tech talent. It is so fundamental. It’s one of the reasons why salaries and remuneration are high in the sector. It’s a by-product of the fact that the sector is growing as quickly as I described. There is a shortage of talent. While I agree there is far more that we can and must do to improve our own talent pipeline, that doesn’t solve the short term problem companies have. 20% of our membership across the board are non-UK EU, and in the UK has benefited enormously from a brain drain and talent drain across the EU over the past ten years. Yes, it’s in particularly specific areas, but the team bits are also important. It’s not about having the technology, it’s about having the ideas of what you can do with the technology. People with a creative background are just as important as the data analysts. It’s when you bring those people together that you drive really exciting innovation.

Across the board, companies of every size are really concerned about this issue. They’re concerned about their existing staff, about how they retain and reassure them about their future in the UK. They’re concerned about the short term pipeline. If you’re a short company that’s growing very fast, you will move your company to where the talent is. If you can’t find it on your doorstep you will relocate to find the talent. That means those potential high growth companies leave if they can’t get access to the talent, but it’s the larger companies as well. They need to remain competitive, and to do that, they need people.

Jo Twist: We already have a skills gap of 600,000 tech vacancies in the UK. That will rise to one million by 2020.

Lord Green: Given that we’re leaving the EU, I imagine you would say the next best option is to be a part of the EEA and stay within the Single Market. If that didn’t happen, and we ended up with an WTO basis for trading with the EU, what impact would that have?

Jo Twist: WTO does not provide free movement of labour. WTO does not provide for the free movement of personal data within the UK and EU, so we would need adequacy declarations. It would be negotiations on an unprecedented scale.

Antony Walker: It would be an extraordinary amount of uncertainty for a lot of businesses, and it would have a lot of consequences for their decision making. It’s highly unattractive option from the perspective of the full breadth of UK tech.

Matthew Evans: We are at the start of another investment cycle. The uncertainty we already have has the potential to impact some of those decisions in telecom. What government needs to start doing quite quickly is narrow down the uncertainty so we know some of the potential options that are on the table.

Jo Twist: The games industry has benefited from a stable regulatory environment in the UK, a very pro-business approach from government, and it really has enabled our innovation and our creativity to flourish. Maintaining that stable regulatory environment is absolutely critical.

Baroness Noakes: As we go into negotiations for leaving the EU, could you give me your top two things that we should take into those negotiations?

Antony Walker: The reality is that the sector is underpinned by a very complex set of rules and regulations that have been created at EU level over many years. Most of the sector is younger than the EU (1973-74) and has grown up with that, and taken membership for granted. The job of any negotiation will be to go through that body of law, directive by directive, regulation by regulation, and try and determine what the implications of each piece of legislation really are for the UK, and how it can best work with and be at least interoperable if it’s not fully harmonised with the EU. You have to go line by line through each regulation to understand particularly in terms of, for example, what’s the process for resolving different views across member states. I don’t think there’s anything other than a very hard slog to go through

If you did have a scenario where the UK was leaving the single market, there will have to be some kind of interim arrangement that gives time for those negotiations, because those negotiations will not happen quickly.

Jo Twist: For us, any trade agreement would have to ensure the free flow of highly skilled talent and the free flow of data.

Matthew Evans: Access to the single market as tariff-free, and having an absolute focus on non-regulatory barriers as well. In the interim I fully support what was said on the prolonged nature of these negotiations. Government has to provide as much certainty as it can to industry. Government can do things, particularly in the telecoms world, around standards, as they tend to be governed by international standards but we’ve relied on the EU to do a lot of the work and interaction around standards bodies. It’s really important that government works to increase activity in this area.

If you’ve read this far, yes, that’s nearly 4000 words I transcribed for this post. Show some sympathy for my swollen fingers by buying me a book off my wishlist. Or hire me.

Labour’s questions on digital and tech for the government on #Brexit

Brexit / UK policy
For more on Brexit and tech policy, visit my dedicated side blog at https://afterbrexit.tech.

Labour has released 170 questions for the government concerning Brexit and policy.

Here are their questions regarding digital and tech.

Freedom of movement and employment

  • What assessments have the government made of the impact on different sectors (e.g. the NHS, agriculture, food production, etc.) of imposing the government’s new system for managing migration from the EU to the UK, and will the government publish those assessments?
  • What agreement will the government seek to negotiate in relation to the continued ability of UK citizens to live, study, work or retire elsewhere in Europe without restriction, as they can at present?
  • Will the government guarantee that no existing employment rights will be put ‘on the table’ when it comes to: (i) negotiating trade deals with third countries in the future; or (ii) seeking to incentivise multinational companies to invest or become/remain headquartered in the UK?

Specific digital policies

  • Will the government seek access to the Digital Single Market (DSM) as part of any agreement on Britain’s future outside the European Union? (For more: post on the DSM)
  • If it does not do so, or is unsuccessful, how does the government plan:
    (i) to manage the risk that films and television programmes which would otherwise have been made in Britain may be relocated to other member states to stay within the provisions of the DSM; and
    (ii) to deliver the benefit for UK digital subscribers of being able to access the same online content and services wherever they travel in Europe?
  • When does the UK government intend to enshrine the provisions of the Network and Information Security directive into UK law, and can it confirm that this will take place before Britain leaves the European Union so that there is no difference in the regulation governing UK-based digital service providers when offering services within the UK or in the rest of Europe? (For more: post on the NIS Directive)
  • Will the government guarantee that future UK data protection standards will be equivalent to the EU’s General Data Protection Regulation framework starting in 2018? (For more: slides on GDPR)
  • If UK businesses are still required to abide by EU laws on consumer protection, competition law, etc. in order to keep trading to the EU, how does the government propose to influence the negotiation of these laws to protect the interests of UK businesses, once we have left the EU? (For more: EU consumer rights online)
  • Will the UK continue to benefit from the EU-funded pledges to equip all ‘public places’ throughout the EU with free wireless internet access by 2020, and uninterrupted 5G access on all road and rail networks by 2025, and if not, will the government commit to match and fund the delivery of these objectives itself?
  • Will the government guarantee the full and prompt enactment of the European Accessibility Act into UK law, so that its provisions in respect of access to computers, phones, ATM and ticketing machines, e-books and television equipment are fully in force before Britain leaves the EU? (For more: post on the EAA)

The Secretary of State for Brexit, David Davis, is currently in the House dismissing these questions as “a stunt.”

It’s not a stunt. It’s my industry, you rhymes-with-stunt.

Seriously. Don’t join a fake web industry body to get a membership badge. Here’s why.

Professionalism

There was a bit of chatter yesterday regarding yet another dubious outfit, promoting itself as an “official” web design and development industry body, phoning around looking for membership signups.

This organisation, and the people behind it, have history, and not in a good way. If these people showed up at a networking event, you would think less of the networking group. They’re that kind of outfit.

On a comment thread about this particular organisation, one person approached by them said:

“I am looking to join and agree, the badge seems appealing and will be useful.”

This is a common assumption for web professionals to make. After all, your clients and prospects will be impressed by a little badge in your footer noting an affiliation with an “official” web industry body, right?

Here’s why joining a dubious “web design and development organisation” to get a membership badge is an incredibly stupid idea that will come back to bite you.

Those badges are supposed to mean something. They imply that you have the backing of an organisation that has evaluated you against a set of professionally determined standards and principles. They imply that the organisation is also a fallback for clients of yours who are dissatisfied with your services.

Membership badges are not meant to be cosmetic, self-promotional sales tools that you get simply for handing over a few hundred quid to someone who cold called you pretending to have legal authority over an unorganised global profession.

Under UK trading standards law, promoting yourself as member of a business body which is not actually a business body is a form of false advertising:

It is also a breach of the Regulations generally to provide false or deceptive information that leads consumers to enter into contracts they would not otherwise have entered into – for example, a consumer contracting with a business only because he saw the logo of a trade association and therefore thought he would have additional protection if something went wrong.

In other words, let’s say a client relationship goes south. The client chose you because they thought that badge on your web site meant that you are the member of a professional standards body which they can now complain to regarding your service provision. They look them up and discover – as you should have done – that you’ve paid a back-room outfit run by someone who uses multiple false names to give you a meaningless graphic for your footer.

Now you’re part of the scam too, and your legal woes just got a hell of a lot worse.

That badge ain’t worth it.

Illegal associations, illegal names

One more comment on these organisations: the one discussed yesterday uses a business name which implies not just official status within the web industry, but authoritative powers within the UK government.

They’re so on top of the ball, this lot, that they don’t realise that in itself is doubly illegal.

Organisations promoting themselves as trade bodies for the web industry often use words in their names which UK law refers to as a “sensitive expressions”, meaning you cannot just use them in a business’s name. As with membership badges, those names are supposed to mean something.

if you are going to claim official status over an industry, you need to have the legal documents proving it. Those documents have to have the voice of that industry, not the gormless lawyer you paid to draft them. An organisation claiming to be representative of a group of professionals, or even a part of the UK government, has a lot of explaining to do.

On the subject of gormless lawyers. One of these organisations has posted their business terms and conditions on their web site. These terms refer to their business structure and company registration. They aren’t cut and pasted from a boilerplate: a lawyer has drafted them at the time the company was incorporated.

That lawyer set up the company and signed the documents without questioning their business name or realising that it is a sensitive expression.

There’s one born every minute. Don’t make it you.

Should screen readers be detectable in analytics?

Accessibility / Privacy

Over at the PowerMapper blog I’ve explored both sides of a great debate: should screen readers be detectable in analytics? It’s an issue that pits accessibility against privacy, with legal complications thrown in for fun. While the technical difficulties of the question make it a pub discussion rather than reality, it’s still a question worth exploring.

I want to thank everyone who supplied quotes and insight on the issue. They made this a fascinating piece to write, particularly as many people took the exact opposite stance than I was expecting from them.

Video: VATMOSS and the future of web development

UK policy
Important VATMOSS update
In December 2017 the European Commission approved a package of reforms to the VATMOSS system. Please visit the VATMOSS resource page for more information. The below post, which is now outdated, will remain here as an archive.

I delivered this presentation on 21 May 2016 at J and Beyond in Barcelona, Spain. It covers what VATMOSS is, where it came from, what problems happened before and after implementation, what the EU VAT Action campaign accomplished, and what is changing in future. This was presented for a web development audience.

Many thanks to all who attended, and to everyone who came up to me afterwards to share their own experiences. Despite being a newcomer to this particular community, you have made me feel more than welcome.

I must offer special thanks to Sigrid and Radek from the Joomla community for making sure I was taken care of after a traumatic journey to the conference, and to Joan and Sonia from the Barcelona WooCommerce community for giving me food, beer and a much needed hug. Thanks also to the Catalan Police for recovering my wallet and passport, and thanks to the honest soul turned it in. To whoever stole all my money, good luck converting that Scottish £20 to Euros.

Banned article: The perfect storm in digital law

Professionalism

This piece was originally published on 21 December 2015 in A List Apart, with the incredible editorial support of Lisa Maria Martin, and an illustration by Ping Zhu.

“So well written and absolutely ties into http://refreshtheweb.org “Professionalizing the web industry” is exactly the point!” – Molly Holzschlag

“I could see a revolution happening if it keeps going this way. Your alistapart article opened my eyes how bad it’s really getting” – Luke Watts

On 18 March 2016 A List Apart deleted the piece without warning or consultation. I was informed of this in a cold four-sentence email from Jeffrey Zeldman with no explanation at 4 PM on a Friday. I had to beg him for a explanation of why. I was eventually and rather resentfully informed that the decision had been made on the grounds that “an article taking a somewhat contentious stand on a thorny and controversial topic of EU and international law is frankly beyond our ability to support.” He also made several allegations about my professional integrity and my motivations in writing the article with no right of response.

It begs the very obvious question of why A List Apart approached me, commissioned me to write a deliberately provocative article, had me as a guest on Jeffrey’s podcast, spent two months supporting me throughout the rigorous editing process,  and then kept the piece published for three months only to expunge all mention of it with no notice. Why does a publication that successful need to engage in the callous act of building people up to tear them down?

In deleting the article, A List Apart also deleted the vital and healthy debate about it which ensued in the comments section. I’m so sorry to everyone who felt inspired to comment, both positively and negatively, as I deeply valued your feedback and opinions as well as your time. Your thoughts, to me, were the most important part of the work. (Edit: thanks Michael Fienen for finding them on Archive. Much appreciated.)

It’s been said that you know you are making an impact when someone tries to stop you. So here it is, the topic that is apparently too dangerous to discuss: the future of the web profession itself.

Illustration by Ping Zhu

It has been a very strange year to be a digital law specialist. In a matter of months we have seen “experts,” courts, and politicians suggest that website administrators should get rid of comments, social sharing, analytics, links, and shopping carts, all as a means of coming into compliance with European legislation. Even pro-European developers are at their wits’ end dealing with the deluge of uninformed advice about how their websites are apparently supposed to work.

The response of web professionals outside the European Union to 2015’s legal developments has been, quite understandably, “Well, I’m not in the EU, so these laws don’t apply to me, right?” To their surprise, legislators have been clear in their expectation that any website in the world accessed by any European citizen must comply with European digital laws. In response, developers worldwide have had to invest countless unpaid hours and resources into understanding their compliance obligations, despite much of the guidance being incorrect, outdated, or even incomplete.

These digital laws, of course, are only as good as the work that has gone into them. That work has clearly left much to be desired. To create better digital laws, legislators need to be able to work with experienced industry professionals who possess both technical expertise and political savvy. If only they could.

Nearly twenty years into our craft’s existence there is, in the literal sense, no such thing as the web profession. We have never professionalized. We lack any form of centralized, cross-platform, and cross-industry organization. There is no Royal College of Web Designers, American Web Developers Association, or Chartered Institute of Programmers. There is no one we pay dues to, no association we belong to, and no union to fight our corner. No common organization protects Ruby coders, content writers, and Drupal developers. We do not have lobbyists, government liaison officers, or rapporteurs. No one is employed to make our voice heard in the policy sphere—and this is a problem.

To date, conversations within the profession about industry organization have revolved around the issues of accreditation and certification. The political aspects of professional organization have never entered the picture. For what groups do exist, a search for “web design and development organizations” reveals pay-per-inclusion directories and outdated sites offering outdated courses. These “organizations” are little more than moneyspinners preying on vulnerable entrants to the profession, and proof that in the absence of a genuine association, anyone can buy a domain calling themselves one.

A true organization aspires to what governments call consultative status: recognition of a professional body as the authentic voice of its industry. Consultative status conveys authority to industry professionals in the eyes of governments. Organized industries working within this model have political offices in their national capitals, are funded by their members, provide expertise born of practical experience, and review draft legislation pertaining to their field. It’s a model that has worked for centuries for older, wiser, and more organized professions.

There is, however, a catch: the consultative model of government legislation does not work when there is no industry body to consult with. That’s why the web profession, through its own decisions, has neither consultative status nor the resources to provide it.

The gathering storm

On a policy level, the fierce individuality characterizing the web profession has meant that we have chosen not to have a voice. That lack of organization has left us unable to address a range of existing problems that have recently combined to create a “perfect storm” in digital law. That storm now threatens to engulf the web profession.

Ivory towers

Some digital laws do indeed make the web a better place, and there are even politicians who can code to a competent level. Unfortunately, they are few and far between. Too many of the laws impacting our craft are what internet law professor James Grimmelmann dubbed “unhelpful interventions”:

Unhelpful interventions fail because they fail to engage with key aspects of how and why people use [the internet]… The key principle is to understand the social dynamics of technology use, and tailor policy interventions to fit. When an intervention keeps users from doing what they want to, they fight back. Helpful interventions, on the other hand, succeed because they do engage with these social dynamics.

“Unhelpful interventions,” as we are all painfully aware, are regulations drawn up on paper by politicians who not only never touch a computer, but are openly proud of that fact. These politicians then rely on the opinions of academics who have credentials, but no technical experience. (Indeed, a professor retorting Grimmelmann’s work expressed bewilderment that he actually used the technology he was writing about. Academics, after all, are supposed to live in an ivory tower.) When policies about code are drawn up inside a theoretical vacuum, what results are counterproductive digital laws—like VATMOSS, the EU Cookie Law, and, after Paris, the renewed legislative assault on encryption—grounded in a defiant rejection of how people actually use the web.

Of course, no one is saying that the makers of the web should be exempt from compliance with digital laws, helpful or otherwise. Indeed, greater legal understanding is desperately needed within our industry. The problem is that these obligations are not only global, but carry frightening levels of legal liability. In a single day, a developer may have to code in compliance with European privacy law, Japanese VAT, and Spain’s “Google Tax.” Good luck explaining that to your professional indemnity insurance provider. Add those obligations to the fact that some digital laws directly conflict with each other—at times, within a single web page—and what results is having to make a personal judgment on which laws to break and which laws to comply with. When digital professionals are put in that position, as you inevitably will be, there is no industry body to call on for support.

Endless committees

An added complication in digital law is the glacial process of internet regulation. Laws governing code can take six, eight, or even ten years to travel from proposal to implementation. Web development works a bit faster than that.

Accessibility laws are a classic example. In the United States, the Section 508 refresh—the update of the law regulating accessibility standards in Federal government websites—has been in progress since 2006. The refreshed standard may be published in 2016 for implementation in 2018. Until then, developers working for the federal government are required to retrofit their work to a pre-WCAG desktop standard from 1998. In the EU, a comparable law mandating accessibility in public sector websites has been languishing in committees since 2012. The only progress made since 2014 has been a four-page committee report (PDF) and yet another draft (PDF).

Government legislation must be thorough, deliberate, and measured. Indeed, legislation regarding the internet that is pushed through quickly—like attempts at mass digital surveillance—is rarely good news. However, digital laws are ultimately documents. It should not take longer to create and ship a document than it takes to create and ship the Olympics. Yet it does.

When an industry working at light speed meets a political process working at committee speed, what results is a surreal state of play where professionals are required to comply with digital regulations that are already outdated by the time they become law. Web professionals are also obliged to wait years for promised reforms, and ensuing changes to their workflows, that never materialize. Without an organisation to act through, liaising with governments becomes a matter of individual effort, which inevitably results in frustration, burnout, and contempt. In the absence of support, the absurd pace of the political process repels the very people who need to be the most involved.

Now it’s personal

Perhaps the most disturbing damage caused by our lack of professional organization has been the slandering of web professionals for offering informed challenges to uninformed laws. Unaffiliated individuals, after all, are easy targets.

For example, ecommerce developers who were not informed about the poorly communicated VATMOSS reforms have been labelled “unprofessional”; a web-savvy EU politician trying to modernize copyright law was accused of being an agent provocateur in an American conspiracy bankrolled by Facebook and Wikipedia; and I have been called a “useful idiot” and “anti-privacy” for speaking up about the problems with the EU Cookie Law, and was monitored on a Twitter list called “underhand people” by a compliance software vendor (curious behavior for a privacy advocate).

Personal attacks on web professionals are even being deployed as a political tactic. Campaigners on VATMOSS have written extensive briefings on the ensuing web development issues involving shopping carts, geolocation data, and IP spoofing. Rather than address those concerns, bureaucrats adhere to talking points insisting that the outcry amounts to a few British moaners complaining about the lack of a VAT threshold. Informed professionals who actually understand the technologies at hand are being openly disparaged by uninformed policymakers, and no one has their back.

Unsafe harbors

The final element in this perfect storm is differing cultural expectations about the role of digital laws. The United States, says the stereotype, sees Europe’s digital laws as anti-business, anti-free speech, and pro-regulation. The EU, in turn, sees the United States’ digital laws as anti-privacy, reckless, and dictated by corporate interests.

While neither stereotype was ever really accurate, the Safe Harbor verdict in October formalized that difference of opinion into law. The ruling (PDF) by the European Court of Justice, which examined the Safe Harbor agreement by the United States to respect European data protection standards, found that the 15-year-old document—in light of the Snowden revelations—was no longer worth the paper it was printed on.

The two systems have reached a stalemate. Europe is demanding that the US tech industry respect European traditions of data protection and privacy, while exasperated US companies reply that they are powerless to change the source of the problem—mass surveillance—and that they, too, are victims of it. While the two sides bicker, the makers of the web have been left to fathom the implications for our work in a world where the most fundamental agreement in digital law has been torn up.

The web we have always known is now at risk of becoming the “splinternet,” a web divided along political and ideological lines. International walls are being built across a web that was meant to be borderless. Some of the walls are actually physical. Sadly, there are those who would gladly build them. That was the case with a French politician who claimed that American services like Facebook and Soundcloud were harming European creators and wanted to restrict their activities in Europe by law. Digital professionals in Europe were briefly at risk of losing their US-based tools out of politicians’ bitterness and jealousy.

Meanwhile, in America, the US Department of Commerce, which administers the Safe Harbor agreement, has responded to the verdict declaring it invalid by…completely ignoring it. On their website, they proudly announce that they are continuing to administer the program as usual. I can’t decide whether their determination to continue running an invalidated program is tragic or comic. Whatever it is, their stance is the digital law equivalent of sticking your fingers in your ears and singing “LA LA LA CAN’T HEAR YOU!”

Spite is never a healthy basis for policy, but at the moment, digital laws are in the hands of some rather dysfunctional individuals who are determined to take their balls and go home. No one is standing in their way.

We are the problem

This, then, is the perfect storm over our heads. The foundations on which we have built the web are being torn apart; the international matrix of compliance obligations grows more complex by the month; those who speak up are being attacked; and our everyday tools have become political footballs.

What can we do about it? In order to weather the storm, we must move past our tribal mentality and literally professionalize. We must redefine our craft as a profession, and that means acting like one: having organizations, industry bodies, and political representation.

Our craft is lateral: we educate each other through informal channels, communities, and social media. Governments, however, are vertical: they distribute information downward through authority organizations. This mismatch in communication means unnecessary hassle on both sides: for web professionals, it means learning about digital laws and compliance obligations by chance on social media. For implementing bureaucracies, it means being bombarded with complaints from individuals who, as far as they are concerned, had their chance to contribute to the process in a formal consultation held years ago. That passive-aggressive cycle is every bit as dysfunctional as the laws themselves.

We cannot expect governments to deviate from the consultative model that works for every other industry in the world to accommodate our personality quirks. Whether we like it or not, we have to start playing their game by their rules. The fact is that governments do ask and they do consult. We have simply chosen not to show up for the talks.

Unifying as a professional industry gets results. Earlier this year, a frightening UK draft internet surveillance bill was temporarily defeated thanks to the intervention of digital rights groups and tech-savvy politicians. One of the grounds that led to its defeat was the fact that the relevant industry body—in this case, the Internet Service Providers’ Association—had not been consulted on the draft law. In the scariest of political circumstances, the answer really was as simple as that. Where an industry body with professional standing exists, and that body has not been consulted on a law, the law is not legitimate. But where no industry body with professional standing exists to offer informed challenges to a law, it’s not the law that lacks in legitimacy.

Divided we fall

In the 1990s, researcher Alan Ryan wrote that “the internet is good at reassuring people that they are not alone, and not much good at creating a political community out of the fragmented people that we have become.” He might have been talking about us today. We have invented everything but a political community. We have no excuse for that.

Our lack of a voice in digital law is no one’s fault but our own. We refuse to look past our personal differences, we do not show up for the political process regulating our own work, we squander our energies firefighting unhelpful interventions, and we disparage the legislators who made them—and they disparage us right back. If it seems as though politicians don’t take the web profession seriously, it’s because we have given them absolutely no reason to believe otherwise.

This year the most crucial elements of the web were placed under legislative threat. Those threats are already returning, and to fight them, we need to change tactics—and fast. That perfect storm is over us, right here, right now. Until we unify, organize, and act, we are standing in it by choice.