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Legal issues of digitalisation in Europe

  • Text
  • European
  • Digital
  • Liability
  • Digitalisation
  • Ownership
  • Businesseurope
  • Noerr
Europe needs better rules for the digital revolution of the economy. Businesses want a standardised, EU-wide legal framework and room for contractual solutions when dealing with data. This emerges from a cross-European survey carried out by Noerr LLP and BusinessEurope, the European umbrella association of national industrial and employers' associations. Business leaders from companies in 20 different countries were interviewed.

Data localisation

Data localisation requirements, entailing the storage and processing of data within specific territories, would only be justified in limited cases, such as for national security purposes. 6 ” This proposition seems to be in line with the opinion of the consulted business leaders as cross-border access to data has become a very or even extremely important issue to 58% of the surveyed companies in order to realise their business model. The big data business models, which the surveyed companies are offering or building are: Data analytics as a service (58%) Tools provider (44%) Data aggregation (43%) Information as a service (40%) Data supply (32%) Data enrichment (30%) Data facilitators (28%) Data brokerage (22%) None (14%) A large part of respondents still face legal issues or obstacles, which relate to legal insecurity and the fact that national regulation is often unclear. Problems range from restrictions to cross-border data flows, data protection and the inconsistent implementation of the new GDPR in various EU Member States, unclarity on access and ownership of data, and forced localisation of data. Those companies who do not see any legal obstacles predominantly man-age access to data through contractual clauses. “Too many different national laws, views, or bases which an international company has to comply with.” – Respondent 6 European Commission: Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: “On the Mid-Term Re-view on the implementation of the Digital Single Market Strategy”. 10.05.2017, p. 10. 14 BUSINESSEUROPE Legal issues of digitalisation in Europe 2017

Does your company assume liability for one or more of the following aspects? Liability for software defects (Product) liability for smart products n=99 30% 39% Artificial intelligence 12% Liability for autonomous processes 12% Robotics Other 7% 6% None 38% Liability Liability is an issue to 62% of the surveyed companies. While 38% do not assume liability for any of the given aspects, 39% assume liability for software defects, 30% (product) liability for smart products, 12% for artificial intelligence and autonomous processes, and 7% for robotics. The importance of liability for software defects is not really a current trend. This topic has been a major issue for those liable (and also for insurers) in all industries with programmable elements for decades. The fact that its significance is still high reflects the yet existing latent risk of software being prone to errors, it is also an indicator of the consequential damage which may result from software defects. However, it is indeed a new trend in digitalised industrial products that the product liability risk for smart products is increasingly coming into focus. Products which depend on connectivity lead in the event of error to a potential infec-tion of entire connected product chains. However, it is to be expected that this new tech-nical risk scenario will be manageable in the mid-term with existing statutory provisions. In contrast, respondents currently do not associate artificial intelligence, machines acting autonomously and the entire issue of robotics with a particularly significant threat potential in terms of liability. While these topics are commonly subject to legal and policy discussions, they are not high on the agenda of industry players. Respondents largely base the distribution of liability on contractual provisions (79%) and product liability rules (62%). Fewer respondents report relying on tort law (29%) as the basis for their digital business models. The current regulation of liability is perceived as adequate to cover companies’ needs and most respondents expressed the view that liability for the digital business models is currently sufficiently or adequately regulated: almost three quar-ters of respondents say this legal issue is very or even extremely regulated and 24% think that their companies’ liability requirements are at least slightly covered by the current legislation. Only 5% said that liability issues are not covered at all. Legal issues of digitalisation in Europe 2017 15 BUSINESSEUROPE

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