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Tech in 2016: Four reasons not to relax

Where technology intersects with the law things are moving fast, and in 2016 the consequences will be far reaching. So what are the key trends to be aware of?

  1. Consumer activism

Last year, Austrian privacy campaigner Max Schrems took on Facebook – and won. Complaining that the transfer of his data to Facebook’s US servers contravened EU data laws, he persuaded the EU court that the widely-used transatlantic “Safe Harbour” agreement was invalid, leaving widespread uncertainty for social media companies, cloud services and even email traffic.

The EU’s overhaul of its data protection legislation is now complete, and the new, tougher rules will bite in early 2018. But this is unlikely to stem the rising tide of consumer activism. The UK case brought by consumers against Google over its circumvention of security settings in Apple’s Safari browser, is another prominent example already underway, and currently headed for the Supreme Court.

All this will force consumer-facing tech companies, as well as those designing software and hardware for the consumer market, to take data protection more seriously. In future, businesses will have to “design in” compliance to their software and business processes.

  1. Growth in crowdfunding

Increasing interest in crowdfunding has already been given tacit official support by UK authorities, for example through the inclusion of such investments within the ISA tax wrapper. However, as crowdfunding is subject to financial services regulation, the opportunities for business will increasingly need to be balanced with robust risk management and compliance.

This trend is likely to continue, with more international tie-ups, and larger-scale fundraising rounds. Chinese investor interest with regional government backing, also offers an opportunity for businesses needing funds. At the same time, media reports of bad investments mean that consumers will be choosing where to invest with great care.

  1. The Europe-wide patent

Long in the making, the European patent is now close to completion. The nuts and bolts of the procedures around Europe’s Unitary Patent are being tightened, and preparations are in place to start the system (such as training judges and developing new court buildings). Assuming national governments give their final approval, 2016 should see this system become a reality.

The architects of the process hope that it will gain acceptance quickly and provide a one-stop shop for protection of inventions across the continent. This would enable major disputes to be dealt with on a European scale, rivalling the US.

  1. Cybersecurity and hacking

Hacking increasingly threatens businesses large and small. TalkTalk’s loss of customer data to hackers in 2015 highlighted how vulnerable organisations are. And this is not just a concern in B2C relationships. Data protection watchdogs take tough enforcement action against companies that have failed to implement proper measures.

Business that use externally hosted or outsourced IT facilities must be on their guard, carefully assessing not only their own IT security, but also that of their IT suppliers. Regulators, customers, staff and stakeholders will give no quarter if security is breached, and, under the new EU data protection law, reporting those breaches will be mandatory.

What’s more, the EU is introducing new laws requiring member countries to tighten up the security measures used by those providing “essential services” including financial, transport and healthcare providers, as well as digital services such as cloud services and online marketplaces.

2016 promises to be a year of change.

David Hall, senior associate and Isabel Teare, technology law associate at Mills & Reeve

Image source: Shutterstock/Kritchanut