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The legal issues deriving from European Privacy Regulation, the Internet of Things, Fintech, the patent box and banking and insurance outsourcing were discussed during the Tech Law Day.
The Tech Law Day was a very interesting event with the participation of very high profile panelists. Below are my top 5 takeaways from the event:
#1 The new EU Privacy Regulation might be a blocker for start-ups, but also for suppliers?
The adoption of the EU Privacy Regulation introduced obligations that might be difficult to handle by small companies such as start-ups which could face a barrier to the entrance, especially in digital markets.
It shall be monitored how each European country will decide to implement the areas left to their discretion, but, if the privacy related obligations become excessively burdensome, start-ups will be prevented from offering their services without breaching applicable data protection laws.
The issue might be also for large suppliers that could end up in situations where their clients request considerable evidence of their data protection law compliance which could not be given by means of documentation produced through internal checks. And the issue will even be increased by the potentially massive fines that can now be issued also against suppliers according to the terms of the EU Privacy Regulation.
The solution might be to obtain a certification of compliance by a third party independent. And indeed as a law firm we are reviewing the possibility to offer such service to our clients.
#2 The Internet of Things is creating new legal issues that require a strict cyber security strategy
Privacy and cybersecurity were unknown risks for many business up until now. The models of business of the Internet of Things represent a revolution for the business of companies. It is possible to handle such issues according to different approaches, including
- either adopting a “network of things” approach i.e. limiting the potential cyber attacks to objects granting full control of the network of connected things to a telecom operator which is the sole point of access to the network;
- or disaggregating data so that if a database is hacked, no valuable data can be obtained if not linked with data stored in a different location; or
- or implementing a “differential privacy” approach which enables to anonymize data as soon as it is processed by the operator’s systems, but still keeps its potential exploitation for statistical purposes.
#3 The Italian patent box is a success story
I discussed about the potential tax benefits of the Italian patent box in this post. Around 4,500 companies applied for it so far and obtained a tax saving of around € 200 million a year. This saving applies to software, trademarks, patents, know-how, design and models. But the regime might narrow down its scope in the coming months and therefore it is recommendable to join this regime as soon as possible.
#4 Blockchain has massive potentials, but also some risks
There is no doubt that blockchain might become a “game changer” for many industries. But it leads to some privacy, regulatory (especially with cryptocurrencies, like the bitcoin), liability and contractual issues. Ad hoc regulations might not be the solution since the blockchain is by definition global and potential regulatory restrictions might limit its exploitations.
Closed blockchains might be better regulated, but in such cases the benefits of a blockchain could be partially lost. A possible compromise would be to have sub-blockchains within a global blockchain whose access is restricted by means of a hash.
#5 Banking outsourcing is in a transitional phase
For the first time Italian banking regulations provide that also outsourcers might face the same sanctions as their clients for breach of the regulations. This circumstance increased the potential risk exposure of outsourcers that are exponentially requested to reduce their fees, increase their clients’ efficiency and now to afford sanctions that might jeopardize their business.
We’ll see how these issues will evolve, but there is no doubt that the Tech Law Day was a great event!
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