The terms “reseller” and “distributor” are often used interchangeably to describe entities that purchase goods or services from a manufacturer and then distribute or resell such goods or services to retailers and consumers. However, there are some key differences between a distributor and a reseller and important issues to consider in agreements with resellers and distributors.
NEWS FOR LAWYERS AND SOURCING PROFESSIONALS
In a recent Wall Street Journal article, cybersecurity journalist Catherine Stupp drew attention to the massive surge in internet-connected devices expected to be in use by the end of 2020. This increase in the Internet of Things, which refers to internet-connected devices ranging from televisions and automobiles to fitness tools and medical devices, presents several challenges to the world of cybersecurity.
The article not only urges manufacturers of internet-connected devices to apply cybersecurity techniques to increase security, but also asks large companies buying devices to incentivize good security practices by only purchasing devices with proper safeguards. The California Consumer Privacy Act, which took effect January 1, 2020, takes a step in the right direction by no longer allowing manufacturers to sell internet-connected devices with weak default passwords. Stay tuned for future developments as cybersecurity races to keep pace with the growth of connected devices.
The 2019 ISG Momentum Market Trends & Insights Geography Report was recently released and contains valuable insights on how the outsourcing industry is growing and transforming around the world. The report, which was published on December 27, 2019, is authored by Paul Reynolds, partner and chief research officer at ISG.
One of the key highlights of the report focuses on annual contract value, or “ACV.” The report finds that the “number of outsourcing contracts signed continues to rise each year, but the cumulative annual contract value (ACV) of those deals continues to fall.” The report attributes the decline in ACV, which fell for the sixth consecutive year in 2018, to the following three factors: (1) falling prices from commoditized service lines, (2) aggressive pricing policies from new market entrants, and
On January 13, the US Department of the Treasury’s Committee on Foreign Investment in the United States (CFIUS) published the final rules implementing the Foreign Investment Risk Review Modernization Act (FIRRMA). The new rules, effective February 13, make permanent the proposed regulations published in September 2019. The Morgan Lewis CFIUS working group is analyzing these developments and will publish a summary of the new rules and any key changes shortly. For more information, read CFIUS Issues Final Regulations Under FIRRMA.
The United States and the United Kingdom entered into the world’s first ever Clarifying Lawful Overseas Use of Data Act (CLOUD Act) agreement on October 3, 2019 (the Agreement). The Agreement, which will enter into force later this year after review by lawmakers in both countries, allows each country’s law enforcement agencies to demand, with proper authorization, electronic data regarding serious crime (defined in Article 1 of the Agreement as an offense punishable by a maximum term of imprisonment of at least three years) directly from technology companies based in the other country.
Please join us for our first webinar of the year where Morgan Lewis partner Barbara Melby will discuss the top trends that will impact the outsourcing market in 2020. Topics will include:
- Forecasts of where the outsourcing market is going
- Outsourcing as a way to disrupt business operations
- The impact of cloud, automation, and AI on outsourcing transactions
- A look at the “Partner Ecosystem”
- Focus on customer experience and outcomes
The webinar will take place on Wednesday, January 15, 2020, from 12:00 to 1:00 pm (Eastern Time). Register for the webinar.
From all of us on the technology, outsourcing, and commercial transactions team at Morgan Lewis, we’d like to wish you and your loved ones happy holidays and a wonderful new year. We will return with new content the week of January 6.
If there are any topics you would like to hear more about in the coming year, please email us.
As always, thank you for reading Tech & Sourcing @ Morgan Lewis!
As 2019 comes to a close, we have once again compiled all the links to our Contract Corner blog posts, a regular feature of Tech & Sourcing @ Morgan Lewis. In these posts, members of our global technology, outsourcing, and commercial transactions practice highlight particular contract provisions, review the issues, and propose negotiating and drafting tips. If you don’t see a topic you are interested in below, please let us know, and we may feature it in a future Contract Corner.
Assignment and Delegation
You signed a long-term deal. It would be embarrassing if, in a few years after signing, the pricing is significantly higher or your service levels are significantly lower than market. Benchmarking provisions are intended to provide a mechanism for ensuring that your pricing and/or service levels are within market (taking into consideration the unique factors applicable to your deal). Set out below are some of the key components of a meaningful benchmarking provision.
Open Banking is an initiative mandated by the UK’s Competition and Markets Authority (CMA) in 2017. It is intended to facilitate better competition in the banking sector by mandating protocols that facilitate the secure sharing of customer-related data of the nine largest banks in the United Kingdom (CMA9) with third-party providers (TPPs).
Open Banking is developed and delivered in the United Kingdom by the Open Banking Implementation Entity (OBIE). The OBIE was established by the CMA and is funded by the CMA9. The CMA’s UK Retail Banking Market Investigation Order 2017 (Order), which applies only to the CMA9, requires the CMA9 to provide their customers with the ability to access and share their account data on an ongoing basis with TPPs through the use of specified application programme interfaces (APIs). This compliments the reforms under the EU’s Second Payment Directive (as transposed in the United Kingdom primarily by the Payment Services Regulations 2017), which requires all payment account providers to permit open access to payment accounts for authorized TPPs, but which does not specify the means of access or prescribe the scope of access in any detail.