Keeping Your Business in Check
The EU and national telecommunications regulatory frameworks are complex and confusing. The law often struggles to keep up with technology. For some, this cat-and-mouse game has enabled new businesses to take-off without the constraints that apply to traditional telecoms companies allowing users to benefit from new and innovative services. But the game is almost over, with EU plans already under way to extend telecoms regulation to a diverse range of apps. Businesses in this space should familiarise themselves with the new rules. Now is a good time to conduct a health-check to understand how the new rules could impact your existing business models and the success of pipeline projects.
What are the EU regulations of which start-up businesses are often unaware relating to technology and communications?
For many start-up businesses the first real challenge is to understand whether their products and services fall within the EU communications regulatory framework and if so, to what extent. Start-ups face the further challenge that the current rules are spread across a series of different EU directives and there are nuances in how different EU Member States have implemented these directives into their own national laws.
Let me give you an example: in the UK, peer-to-peer over-the-top (OTT) chat style apps are not subject to the UK telecoms regulatory framework; but if you launch the same service in countries such as Germany or France, you may find the local telecoms regulator takes a different view.
Different regulatory treatment can pose real practical issues. Such issues are felt more acutely in the communications industry than most other industries, as apps and services are increasingly global in nature. The cost of having to tweak products and services and the underlying use terms along national borders can be prohibitive and contrary to the ethos / mission statement of the business.
There are many regulations in this area and the trend for more regulation will stay. But areas which catch US companies doing business in the EU off-guard is how network security and data privacy, net neutrality and customer protection are approached. The EU rules can often be stricter than equivalent rules in the US.
With the global ransomware attacks, what do you think could change on the legal spectrum, to help tackle such attacks?
Governments and regulators need to face-up to the difficult balancing exercise that has to be carried out here, and accept that trade-offs between conflicting interests may have to be made.
We all want the highest level of protection of our privacy and security of our data; and at the same time, we want to know that those guilty of heinous offences (such as terrorism, hate crime etc.) can be brought to justice quickly. Currently these conflicting goals are playing out in debates around encryption and whether ISP, telecoms companies and others in this space should be required to weaken / break encryption.
The solution is not in legislation. It’s certainly possible to draft a law that at one end of the spectrum bans any form of encryption. At the other end of the spectrum the law could at least allow access to only certain state agencies (subject of course to a well-crafted process to ensure proper oversight and authorisation). However, any weakening of encryption creates risks that overall services become less secure. So it’s not just the ‘good guys’, but also the ‘bad guys’ that can exploit these weaknesses.
With new technological advancements in commercial environments for example, drones and VR, what further considerations must your clients make to ensure they take the right legal action?
The law in these areas is still developing. Businesses should be looking not just to what is currently on the statute books, but should be trying to identify with their policy and legal advisers where the potential direction of travel of any new rules might lie. In many cases, the existing rules will either not apply or will apply in a way that was unintended as the advancements in question were not contemplated under the original laws. Early participation in any new legislative exercise can be critical to the future success of these businesses.
What is the most challenging aspect of devising pragmatic commercial advice for established businesses?
The most challenging aspect can be to truly know the business’s commercial concerns and risk appetite. Advice can be legally correct but if it does not reflect the business’s commercial needs, style or culture it cannot be implemented. Taking the time to sit down and have some ‘reverse training’ from clients about where their business is going can pay huge rewards for both clients and advisers. However, clients are busy driving their businesses forward so getting their time may be challenging. Advisers need to be attuned to the time constraints of businesses, especially in this space where these businesses face 24/7 demands from their own customers.
What is on the horizon that businesses in this space should be aware of?
The current EU telecoms regulatory framework is being reviewed and updated. Existing rules in many areas will see changes. For those providers who operate at the B2C level, the changes to the current rights for end-users (including a new proposed contract summary template to be crafted by the EU Commission) need to be analysed carefully. For many OTT providers this will be the first time they become subject to the EU telecoms regulatory framework. It’s critical that businesses in this space understand how the new rules will impact their products and services and plan ahead.
About Nina Cummins
Nina is a telecoms regulatory expert with over 15 years’ experience. She assists multi-national clients on navigating the complex EU and various national telecoms regulatory frameworks, to enter new markets and launch new products and services. She has direct experience of working with high paced technology companies. Before joining Osborne Clarke LLP she was Associate General Counsel Competition & Telecoms (EMEA) at Facebook’s London office. She is qualified in England & Wales, Northern Ireland, Republic of Ireland and Germany.
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Contact
Nina Cummins (Partner & Rechtsanwältin)
Osborne Clarke LLP
London, UK
Tel: +44 207 105 7158
Email: nina.cummins@osborneclarke.com
