Welcome back. Today we mark two milestones in what might be called Globalization 2.0. President Trump signed legislation to implement the U.S.-Mexico-Canada Agreement, which will have an impact on the technology sector in several ways, from data flows to liability. The European Parliament approved Brexit, which some say could affect the labor market in AI-intensive markets such as London.

First up: WSJ Pro's Angus Loten examines the AI behind Flip Fashion, a startup that sends clothes to customers before they pay, hoping they will try things on, and get their friends to vote on what they should buy or return. All of those votes are data, which is fed into the company's algorithm. 

Fashion site flips familiar e-commerce model with AI. Many online retailers try to make it easy for customers to return items they have purchased. Flip Fit has taken things one step further by shipping customers clothes they haven't paid for, then encouraging them to try on the items at home and have a Facebook-like social network vote on what to buy and what to return. Angus Loten has the story for WSJ Pro.

The e-commerce site, launched last year, said it feeds all of the data generated into an AI-powered system that comes up with a profile of each shopper. The idea is to push the brands, styles and sizes that customers are likely to buy.

“When you combine e-commerce and social media you get a richness of data that you’ve never seen in this industry,” Flip Fit co-founder Jonathan Ellman says.

What do you think of this one? Shoppers take a selfie wearing the clothes. Others in their Flip Fit network vote yes or no on the items—much as friends or family might do in a store fitting room—which can then be bought or returned. The more users vote, the more credits they rack up for future purchases, currently $1 a vote. Shoppers can invite people they already know. The platform also suggests adding other Flip Fit users. When clothes are returned, users fill out a questionnaire explaining why. 

Data quality. Feedback provides more accurate data, as no purchase has been made and users can be candid, according to Mr. Ellman.

North American trade deal formalizes free flow of data, other tech issues. The U.S.-Mexico-Canada Agreement, which President Trump signed Wednesday, hands executives and companies more certainty about technology issues, including liability protection and free flow of data across borders, analysts say. USMCA succeeds the North American Free Trade Agreement, which took effect in 1994, when websites were still getting started. The new trade deal includes digital guidelines that Nafta lacked, Agam Shah and Jared Council report for WSJ Pro. 

One provision in USMCA prevents Mexico, the U.S. and Canada from imposing so-called data-localization requirements, which can limit cross-border data flows from local data centers.

USMCA also includes a requirement that all three countries refrain from imposing tariffs on those data transfers or taxing those data transfers, said Jason Oxman, chief executive of the Information Technology Industry Council, a Washington-based advocacy group with members that include Microsoft Corp. and Amazon.com Inc.

“The advantage of an agreement like this is it lowers costs for the movement of data across borders. And it provides certainty that those costs won’t be increased by the imposition of tax on the kind of digital services that a CIO needs to buy,” he said.

Facebook reaches $550 million settlement in facial-recognition lawsuit. Facebook said Wednesday it has reached a tentative $550 million settlement of an Illinois class-action lawsuit alleging it wrongfully used its facial- recognition technology on residents of the state, the WSJ reports. The long-running suit alleges the company violated a 2008 Illinois law prohibiting companies from collecting biometric data without users’ consent. Rather than seeking permission, the plaintiffs alleged, Facebook created and stored “face templates” that powered an automatic photo-tagging feature.  The $550 million Facebook has agreed to pay will be the largest-ever cash privacy settlement won by class-action attorneys, with estimated payouts of around $200 for each affected user, according to a press release by the attorneys who brought the case. Facebook didn’t admit to wrongdoing.  

Microsoft investing $40 million in effort to solve global problems with AI. Microsoft Corp. launched a health research initiative Wednesday to address medical challenges using artificial intelligence, GeekWire reports. The AI for Health initiative will focus on studying, preventing and treating diseases; studying mortality and longevity; and reducing inequity in global health care, Geekwire said. Microsoft will provide grants, data science experts, technology and other resources to help partner organizations, according to Geekwire. “Artificial intelligence has the potential to solve some of humanity’s greatest challenges, like improving the health of communities around the world,” Microsoft President Brad Smith said in a statement. AI for Health is part of a $165 million AI for Good initiative, Geekwire said. 

European parliament approves Brexit divorce deal. Lawmakers in the European Parliament on Wednesday supported an agreement for the U.K. to leave the European Union, paving the way for the country’s departure from the bloc on Friday and fulfilling the outcome of its June 2016 referendum on EU membership.

U.K. Prime Minister Boris Johnson’s government will need to keep the European Parliament on his side. Its support will almost certainly be required for Britain to wrap up a trade deal with the EU by year’s end, a deadline the British premier has said won’t be extended. EU member states are still agreeing their red lines for those talks, where the bloc will demand British adherence to many EU laws and standards in return for the U.K. receiving zero tariff, zero quota access to EU markets and vice versa. (WSJ)

Facebook Inc. reported a growing base of users and increasing quarterly revenue on Wednesday, capping a year of reliable strength in its core advertising business even as expenses climbed. Higher expenses compared with a year earlier were one of the few down-notes in the company’s earnings report. (WSJ)

Tesla Inc. posted a fourth-quarter profit after its Model 3 compact car helped fuel record deliveries for the electric-car maker. (WSJ)

Interior Department officials plan to formally adopt a no-fly rule aimed at drones made in China or with Chinese parts, but will grant exceptions when drones are needed to help respond to natural disasters and other emergencies. (WSJ)

Write to Enterprise Technology Editor Steven Rosenbush and Pro AI Deputy Editor John McCormick.

Follow us on Twitter: @wsjproai, @steve_rosenbush, @J_J_McCormick, @tomloftus, @SCastellWSJ, @JaredCouncil  and @angusloten.