Regulatory Changes Ahead: The 2018 Landscape for Technology Businesses in Europe

01/09/2018
Client Alert

Summary

The European Union has published its 2018 Work Programme which sets out a challenging agenda of legislative and regulatory change for the technology, media and telecoms (TMT) sectors, to be delivered in conjunction with its Digital Single Market (DSM) strategy. Key initiatives for 2018 include completion of legislative proposals on the Electronic Communications Code; copyright reform; the Digital Content Directive; e-privacy; cross-border parcel delivery services; and prevention of unjustified geoblocking. In addition, the General Data Protection Regulation (GDPR) comes into effect in May 2018. Since the launch of its DSM strategy in 2015, only a quarter of the Commission’s legislative proposals have been implemented, an indication of how lengthy and complex the EU law-making process can be. It remains to be seen how effectively the Commission will convert its lists of priority proposals into new laws and regulations having a tangible impact on businesses.   

2018 EU Work Programme

The EU’s DSM initiative is well past the halfway point (in terms of time elapsed, but not in terms of progress achieved). The GDPR will come into force in May 2018 and companies with EU operations should already have plans to take that into account. The EU also plans to implement regulation on digital contracts, telecom reforms, copyright changes and, the use of non-personal data.

The European Commission publishes its annual Work Programme each year to set out what it plans to achieve in terms of specific implementation of its key initiatives. This provides a helpful guide that explains what to expect in terms of new laws and regulations (although the question of when to expect any given regulatory change is harder to answer in the light of the notorious delays endemic to the EU legislative process).

For the TMT sectors, further progress in the creation of the EU’s DSM dominates the regulatory agenda and the Commission’s Work Programme.

And, despite Brexit, the UK is not immune. While the process of Brexit is mired in uncertainty – impacting business globally – the juggernaut of EU regulation grinds on, encompassing the TMT sectors across the EU, including the UK. While timing is everything and Brexit may impact the UK’s adoption of some of these initiatives which will not reach fruition until later in 2019, businesses have to assume that the UK is likely to inherit or adopt most or all of what the Commission plans for the TMT sectors.

Digital Single Market

The Commission launched its DSM strategy in May 2015. We have written a number of articles following the DSM’s progress at its inception, one year in, and in 2017 following a mid-term review. With the Commission still waiting for a number of its proposals to be delivered, 2018 is a key year in the life of the DSM, with the potential for a number of developments as the EU looks to push ahead with its strategy.

The execution of the Commission’s DSM proposals is one of its key aims for 2018. Of the 24 legislative proposals that the Commission has made as part of its DSM strategy since May 2015, only six have been adopted. With such slow returns, the Commission made clear in its Work Programme that the European Parliament and Council, its co-legislative bodies, should push these remaining legislative proposals through as quickly as possible.

The Commission has also recognised that it too has work to do, setting out three new proposals to address new challenges – such as “fake news” – to be fleshed out in 2018, and targeting specific areas like cybersecurity and data protection that will need to be addressed for the DSM to succeed. With so much left on the agenda, 2018 will be a crucial year in the DSM’s development.

2018 Key Issues

In terms of key issues for 2018, the Commission has targeted completion of legislative proposals on:

  • the Electronic Communications Code – a code which lays out the regulatory framework for electronic communications online;
  • copyright reform – in particular the proposed directive on copyrights in the DSM;
  • the Digital Content Directive – a proposed directive which aims to regulate contracts for the supply of digital content;
  • unjustified geo-blocking;
  • cross-border parcel delivery services; and
  • e-privacy.

It plans to prioritise these areas, setting out a number of specific regulations and directives on which the EU Parliament and Council should focus their attention.

On a slightly more long-term and general note, the Commission also stressed the importance of:

  • achieving very high speed fixed and mobile networks (5G) and increased coordinated availability of spectrum – the radio frequencies allocated to the mobile industry and other sectors for communication – by 2020; and
  • making the most of opportunities presented by new technologies such as high performance computing, autonomous cars, and artificial intelligence.

Outside the specifically digital sphere, the Commission also plans “A New Deal for Consumers” – that is, a targeted revision of the EU consumer directives on unfair terms in consumer contracts and unfair business-to-consumer commercial practices, with the aim of providing better protection of consumer rights.

Cybersecurity

The Commission believes that cybersecurity and the confidence of European citizens will play a key role in ensuring the DSM is a success. It intends to respond to the rise in cyber-attacks and new varied threats faced by European citizens online by completing the package of proposals that it started in September 2017, and setting up a network of cybersecurity competence centres.

Data Protection

With the GDPR due to come into effect in May 2018, the Commission’s Work Programme gives special mention to the need to provide guidance to help prepare citizens, businesses, and public administrations before the GDPR comes into force. This will involve liaising with the European Data Protection Board, a joint body of national data protection authorities that will assume its functions on 25 May 2018.

New Proposals

With the digital space constantly evolving and creating new challenges, notably with the rise in awareness of “fake news” in 2017, the Commission has outlined three new DSM proposals:  

  • a proposal on fairness in platform-to-business relations (scheduled for publication in Q1 2018);
  • an initiative addressing online platform challenges regarding the spreading of fake information (scheduled for Q1 2018); and
  • a revision of the Commission’s guidelines on market analysis and assessment of significant market power in the electronic communications sector (scheduled for Q2 2018).

Conclusion

Only a quarter of the Commission’s DSM legislative proposals have been implemented since 2015. That is an indication of how lengthy and complex the EU law-making process can be. It remains to be seen how effective the Commission’s Work Programme is, and whether its explicit lists of proposals and issues to be prioritised have any tangible impact. Indeed, the Commission will also have some work of its own to do, in setting out its three new proposals in more detail, and finalising its proposals in areas such as cybersecurity and data protection. 

We will be monitoring the progress of these various proposals over the course of 2018, and will provide further updates in what will likely be a significant year for the EU’s DSM strategy and, by extension, the legal and regulatory framework across the digital sector in Europe.

 

Rayhaan Vankalwala, a Trainee Solicitor in our London office, contributed to the writing of this alert.

Email Disclaimer

Unsolicited e-mails and information sent to Morrison & Foerster will not be considered confidential, may be disclosed to others pursuant to our Privacy Policy, may not receive a response, and do not create an attorney-client relationship with Morrison & Foerster. If you are not already a client of Morrison & Foerster, do not include any confidential information in this message. Also, please note that our attorneys do not seek to practice law in any jurisdiction in which they are not properly authorized to do so.

©1996-2018 Morrison & Foerster LLP. All rights reserved.