This country-specific Q&A provides an overview to technology laws and regulations relevant in Ecuador.
It will cover communications networks and their operators, databases and software, data protection, AI, cybersecurity as well as the author’s view on planned future reforms of the merger control regime.
This Q&A is part of the global guide to Technology. For a full list of jurisdictional Q&As visit http://www.inhouselawyer.co.uk/index.php/practice-areas/technology
Are communications networks or services regulated? If so what activities are covered and what licences or authorisations are required?
The radio spectrum and the general regime of communications and telecommunications are the exclusive competence of the Central State. Because of this, it is the State who is in charge of administrating, regulating, controlling and managing the telecommunications field in the country, being considered a strategic sector from a constitutional sphere. A strategic sector is defined as those areas that because of their importance and magnitude have a decisive economic, social, political or environmental influence, and must be channeled for the full development of rights and social interest.
Additionally, the Constitution of the Republic of Ecuador, published on October 20, 2008 in Official Register No. 449, defines telecommunications as one of the public services to be provided by the State, who furthermore is empowered to control and regulate it.
In light of the above, telecommunications in Ecuador are regulated through the Organic Telecommunications Law, (whose last reform entered into force on February 18, 2015), and its Rules, in force since January 25th, 2016. Said regulation, based on the constitutional mandate, has as its purpose to develop the general telecommunications and radio spectrum regime, having the State the authority to administrate, regulate, control and manage in the entire national territory.
The Telecommunications Law applies to all activities of establishment, installation, and operation of networks; use and operation of radio spectrum; telecommunications services; sound and television broadcast services, and audio and video subscription system networks.
The Telecommunications Regulator and Control Agency (Agencia de Regulación y Control de Telecomunicaciones “ARCOTEL”) is the agency in charge of issuing the licenses necessary for a natural or legal person to be able to provide telecommunication services. The aforementioned licenses can be divided in three groups:
- Concession: Applies for the provision of landline telephone services and advance mobile phone services by private, mixed or popular and solidarity economy companies.
- Authorizations: Applies for the use and exploitation of the radio spectrum by public companies and State entities. It is also applicable for the provision of audio and video subscription services for natural and legal persons governed by private law, which is implemented through a permit.
- Registration of Services: Applies to natural and legal persons providers of carrier services, submarine cable operators, radio amateur, added value, radio communication, networks and private use and resale activities.
For the granting and renewal of the licenses for the provision of services, the ARCOTEL takes into account the need to meet: the technological development, the evolution of the markets, the National Telecommunications Plan, the needs for the sustained development of the sector and of the State, and the universal access to information and telecommunications technologies, as well as, effective fulfillment of the public or general interest.
The licenses, which are product of the concessions and authorizations for the provision of telecommunication services, have duration of up to fifteen years.
Without previous written authorization by the Telecommunications Regulatory and Control Agency, the licenses cannot be disposed, assigned, transferred, leased or encumbered by any means. If any of the fore mentioned have taken place, said infringement is sufficient grounds for the early termination of the license.
For the granting of the radio spectrum licenses, the State must attend to the public interest, promote the rational and efficient use of previously referred to limited resource, ensure equal and fair access and assignment under transparent conditions. To that effect, the State can deny the granting of licenses for the use of the spectrum when the public or general interest prevails.
On the other hand, it is important to note that Ecuador is a member of the Andean Community of Nations since 1969; organism that through decisions of a supra-national character has also regulated the telecommunications sector in Ecuador, of which the following can be mentioned:
- Decision of the 462 Cartagena Agreement, of September 02, 1999, known as Integration of the Andean Telecommunications Services.
- Decision of the Cartagena Agreement No. 432 of February 14, 2001, through which the Common Interconnection Standards are regulated.
- Resolution of the Andean Secretariat No. 59 of April 27, 1998, known as Regulation for the Application of the Reciprocity Principle in the Authorizations that are Granted on Specific Parts of the Orbit Resource/Spectrum of the Member States.
It is important to understand that all the legislation that regulates telecommunications issues must be in harmony with what is established by the Constitution, in view of the constitutional supremacy principle that governs in Ecuador.
Is there any specific regulator for the provisions of communications-related services? Are they independent of the government control?
The regulatory body of telecommunications services is the Telecommunications Regulatory and Control Agency (ARCOTEL); body ascribed to the Ministry of Telecommunications and Information Society. The ARCOTEL is the entity in charge of the administration, regulation and control of telecommunications and of radio spectrum and its management, as well as, of the technical aspects of the management of mass media that use frequencies of the radio spectrum or that install and operate networks.
The Telecommunications Regulatory and Control Agency is vested with the following powers:
- Issue regulations, technical standards, technical plans and other actions that are necessary for the exercise of its powers, so that the provision of the telecommunications services comply with the stipulations of the Constitution.
- Prepare, approve, modify and update the National Frequencies Plan.
- Prepare the proposals for the economic assessment of the assignment and use, the use and/or operation of the radio spectrum, the rates for the use of frequencies and rights for the granting and renewal of the licenses.
- Exercise control over the provision of telecommunications services, including international long distance service.
- Exercise technical control of the mass media that use frequencies of the radio spectrum or that install and operate networks, such as audio and video by subscription.
- Control and monitor the use of the radio spectrum.
- Regulate, conduct and give judgment on proceedings for the granting, administration and extinction of licenses.
- Implement, organize and administer the Telecommunications Public Registry.
- Authorize the assignment, transfer or disposal of the licenses.
- Regulate and control the rates for the provision of the telecommunications services in accordance with the Law.
- Lay down the requirements, contents, conditions, terms and deadlines of the licenses.
- Set general or specific regulations when there are distortions of competition in telecommunications services or affect the rights of the subscribers or users, including special rules for those providers that, individually or collectively, have market power.
- Approve and register interconnection and access agreements, and order their amendment when necessary.
- Regulate interconnection and access, and intervene in said relations, as well as, issue the pertinent provisions.
- Establish and collect the economic rights for the provision of telecommunications services.
- Collect the contribution for the execution of the universal service.
- Homologate telecommunications terminal equipment and rate the corresponding technical certification laboratories.
- Initiate and conduct the administrative procedures to determine infringements and impose if applicable the penalties set forth in the Law.
- Exercise coersive jurisdiction in all cases within the scope of its powers.
- Authorize, within the scope of its powers, the operations that in any way involve a change in the control of the telecommunications service providers.
- Conduct and regulate complaint procedures for violations of the rights of subscribers or users of telecommunications services.
- Inspect and oversee the installation, establishment and operation of telecommunications networks and the systems of mass media that use the radio spectrum, as well as, the networks of audio and video by subscription.
- Request the telecommunications providers any information considered relevant, produced as a consequence of the provision of the services and execution of the licenses within the scope of its powers.
- Evaluate and regulate the behavior of the telecommunications market, determine the existence of distortions that affect competition or that undermine the rights of the subscribers or users, as well as, determine the existence of providers that, individually or collectively, have market power.
- Conduct studies on the telecommunications sector and keep and publish the statistics of said sector.
- Regulate the use/occupation of private property goods and infrastructure for the installation of telecommunications networks and issue easements.
- Coordinate with the competent public authorities the access and occupation of public property to reach the goals of this Law.
- Lay down the necessary regulations to ensure the safety of communications and the protection of personal data.
- Regulate and control activities related to e-commerce and electronic signature, in accordance with the legislation in force.
The ARCOTEL is a body ascribed to the Ministry of Telecommunications and Information Society; therefore, it is part of the executive branch and lacks autonomy in its actions.
Does an operator need to be domiciled in the country? Are there any restrictions on foreign ownership of telecoms operators?
The Telecommunications Law sets forth that licenses for the provision of telecommunications services, use or operation of the radio spectrum, and establishment and operation of telecommunications networks can only be granted to natural persons residing or legal persons domiciled in Ecuador that meet all the technical, economic and legal requirements specified in said Law, its Rules and the Regulation to Grant Licenses issued by the Telecommunications Regulatory and Control Agency.
Foreign legal persons providers of services, including state owned companies of countries that form part of the international community, must be likewise domiciled in Ecuador in order to obtain the respective licenses.
In line with the above, the Company Law in its article 6 mandates that if the activities that a foreign company is going to perform involve the provision of public services such as the provision of telecommunications services, it will be under the obligation to domicile itself in the Republic of Ecuador.
Are there any regulations covering interconnection between operators? If so are these different for operators with market power? What are the principal consumer protection regulations that apply specifically to telecoms services?
4.1. Laws that regulate interconnection:
Interconnection between operators is regulated by the Organic Telecommunications Law and its General Rules, legislation that establishes that interconnection is the connection or union of two or more public telecommunications networks, through physical or radio means, via equipment or installations the provide telecommunications lines or links for the exchange, transit or termination of transit between two telecommunications services providers, which allows communication between users of different providers in an ongoing and discrete manner. Interconnection and access must be performed in accordance with the equality, non-discrimination, neutrality, good faith, transparency and publicity principles, and taking into account the application of market prices.
Access refers to network elements and resources, as well as, to the use and sharing of infrastructure without any impediments of any kind. As a general rule, the use of interconnection and of access will be carried-out in exchange for monetary compensation.
Furthermore, the telecommunications services providers that operate or control public telecommunications networks are under the obligation to interconnect with other public telecommunications networks and allow access to other service providers. In order to exercise control, the Telecommunications Regulatory and Control Agency, at any time, can intervene in the interconnection and access relationships, at the request of any of the parties involved or ex officio, for the purpose of fostering interconnection and access of the different providers.
Moreover, through the publishing of Resolution 602-29 CONATEL issued on March 14, 2007 and last amended on June 26, 2012, the Interconnection Regulation was enacted, whose purpose was to develop general interconnection rules and principles enshrined in the General Rules to the Telecommunications Law.
It is important to not that said resolution was issued under legislation no longer in force; nonetheless, in spite of this, said resolution remains in force.
In addition, Resolution 432 dated February 14, 2001, issued by the General Secretariat of the Andean Community of Nations, published in Official Register No. 2266, contains the common rules on interconnection, defining basic concepts and obligations based on which the interconnection that takes place in each of the Member States of the Andean Community must be developed.
4.2. Dominant Operator in Ecuador and its effects:
The legislation refers to an operator with market power as that provider of telecommunications services and services by subscription that has the capacity to have a significant influence in the market. Said capacity can be reached individually or collectively, when through any means the operator has the ability to behave independently of its competitors, buyers, customers, suppliers, users, distributors or any player in the market; when in can effectively control, directly or indirectly, the prices in the market, in a segment of the market or in a determined geographical zone. It is understood that an operator has market power when the provider of telecommunications services or services by subscription holds more that 50% of the subscribers, customers, active lines, traffic or others within a determined market or service.
Operators with market power or preponderant operators have the obligation to set interconnection charges that promote the eradication of anticompetitive practices.
Resolution 347-13-CONATEL-201 of July 30, 2010, issued by the National Telecommunications Council (currently ARCOTEL) concluded that the company Consorcio Ecuatoriano de Telecomunicaciones S.A. CONECEL (part of the America Móvil Group) was the dominant mobile operator for voice services in the Ecuadorian territory, which was determined through calculations based on the gross income of the company within the relevant market.
The Telecommunications Regulatory and Control Agency can impose on the operator with market power or preponderant operator the following obligations:
- Provide information related to accounting, technical specifications, network characteristics, delivery and use conditions, including, conditions that could limit access or use of the services or applications, as well as, prices.
- Provide the information requested by the Telecommunications Regulatory and Control Agency in a timely and complete manner, in accordance with the forms and periodicity determined by the agency.
- Keep cost or regulatory accounting, if it provides several services, in the format and methodology determined by the Telecommunications Regulatory and Control Agency.
- Set prices and rates that allows for the promotion and fostering of effective competition and benefits for users in terms of price and quality of the services, as well as, favor investment by the service provider, especially in next-generation networks. It includes tariff mechanism for on-net and off-net services.
- Set interconnection charges that promote the eradication of anticompetitive practices.
- Limit commercialization of services and use of terminal equipment.
- Prohibit the signing of leasing contracts for the installation of infrastructure.
- Set symmetric interconnection charges.
- Set asymmetric interconnection charges.
- Regulation of symmetric rates.
- Regulation of asymmetric rates.
- Obligations of infrastructure sharing.
- Regulation on the uses of trademarks and trade names.
4.3. Consumer rights applicable to telecommunications services:
Fundamental consumer rights are those set forth in the Constitution of the Republic of Ecuador, in addition to those stipulated in the Organic Consumer Protection Law. The consumer rights listed below are those that have a direct relation to telecommunications:
- The right to protection of life, health and security in the consumption of goods and services, as well as, the satisfaction of basic needs and access to basic services.
- The right to have private and public providers/suppliers offer competitive and quality goods and services, and to choose them freely.
- The right to a transparent, fair and non-discriminatory or abusive treatment by providers of goods and services.
- The right to have access to effective mechanisms for administrative and judicial protection of their rights and legitimate interests.
- The right to pursue administrative and/or judicial actions as the case may apply.
- The right to have access to a complaint book, which must be keep in the premises of the company, where the corresponding complaint can be written down.
In accordance with the legislation referred to above, the Organic Telecommunications Law establishes that the following user rights are inalienable:
- Have available to them and receive the contracted telecommunications services in a continued, regular, efficient, quality and effective manner.
- To choose freely the service provider, the service plan, as well as, the contracting modality and the terminal equipment through which it will receive the contracted services.
- To secrecy and the inviolability of the content of its communications, with the exceptions provided for in the Law.
- To privacy and protection of personal data by the service provider with whom it contracted its services, subject to the legislation in force.
- To obtain accurate, free and non-misleading information on the characteristics of the service and its rates.
- Have available free of charge emergency call services and information on plans, rates, prices and balance.
- To obtain, in unit of seconds, the measurement of the contracted service, when it comes to telephone services in all its forms.
- To an accurate, timely, clear and precise billing and valuation, according to the applicable regulations. It is not permitted any rounding method.
- To pay rates in accordance with the corresponding regulations and contracted plans, as applicable.
- To have its provider inform in a timely manner on the interruption, suspension or breakdowns of the contracted services and its causes.
- To obtain form its provider compensation for the services contracted and not received due to deficiencies in the services or the refund of the amounts wrongly charged.
- To have the constitutional, legal, and statutory rights of subscribers, customers, and users upheld in the contracting of the services.
- To have their requests and complaints related to the provision of the contracted services processed and resolved in a timely-manner, in accordance with the applicable regulations.
- To demand to the providers of the contracted services, the compliance with the applicable quality parameters.
- To number portability and to keep its number in the case of telecommunications services that use numeric resources.
- To receive yearly, free of charge and by electronic means, an updated subscriber directory of landline telephone services, issued by the hired service provider.
- To be provided with an adequate and timely protection by the competent bodies, against the legal, contractual or statutory breaches of the telecommunications services providers.
- To have access to any authorized application or service available on the Internet. The providers cannot limit, block, interfere, discriminate, hinder or restrict the right of its users or subscribers to use, send, receive or offer any content, application, development or legal service through the internet or in general through its networks or other information and communications technologies.
- That the conditions for the provision of the contracted services are maintained; any unilateral change in the contracts for the provision of services will be considered null and void.
- To unilaterally terminate a standard contract signed with the service provider ate any time, with previous notice of at least fifteen (15) days.
- To file a complaint before the competent authorities in relation to breaches and infringements of its rights by the providers.
- To the accumulation and use of balances in the provision of telecommunications services.
- To have information on the health risks that could result as a consequence of the installation and operation of networks.
- To not receive mass or individual messages or calls for the purpose of direct sale, marketing, advertising or proselytizing that has not been previously and expressly authorized by the customer, subscriber or user.
Likewise, the General Rules to the Organic Telecommunications Law states that to ensure the rights of the users, the following is enshrined:
- The right to choose the service provider.
- The right that creates an obligation on the part of the telecommunications providers to deliver information.
- The right to free access to emergency calls.
- The right to obtain free of charge information, including allowances, sale promotions, discounts, balances an other information services established by the ARCOTEL.
What legal protections are offered in relation to the creators of computer software?
The Organic Knowledge Social Economy Code, published in Official Register 889 dated December 09, 2016, regulates the property and management of intangible goods, including software. Furthermore, software is considered a work eligible for protection by the Law and it is categorized as a literary work.
Said protection is granted regardless of whether it has been incorporated in a computer and whatever form it has been expressed, be it in source code, that is in readable form by humans, or as object code, that is readable form by a machine or computer; be it in operating systems or application systems, including flow diagrams, plans, user manuals. In general, those elements that makeup the structure, sequence and organization of the program.
It is excluded from this protection, standard forms of software development. In other words, the law only protects software as such, and not those responsible for developing it. The scope of protection focuses on the product itself.
In Ecuador, the rights of the artists has two aspects:
a) Moral rights: through which the artists or performers have the right to be recognized as intellectual authors of the work. As a result, they can object to any act that distorts, mutilates or modifies its interpretation or in any way damages its honor or reputation.
b) Economic rights: Are those marketing and profit rights from the exploitation of the work. Both moral and economic rights of software development can be held by the same person; however, the author can only assign economic rights to a third party. The party to whom the economic rights are assigned can be a natural or legal person.
When software development is performed under a labor relationship or under commission, the ownership of said work is held at all times by the author, unless otherwise agreed to. As previously mentioned, the author can assign its rights to a third party, however, the author will keep its power to exploit the works in a manner other than the one stipulated in the contract, as long as, it does so in good faith and does not harm unreasonable harm the normal exploitation of the work carried out by the employer or contracting party.
Additionally, the Organic Knowledge Social Economy Code determines that in the event that public servants in the performance of their duties develop the software, the employer, in other words the State, will be the copyright owner.
Are specific intellectual property rights in respect of data/databases recognised?
The Organic Knowledge Social Economy Code treats databases of any kind as works that are subject to protection. The information and the content of the database product of investigations financed with public funds are of open access. Compilations of data and of other materials, in any form, that because of the novelty of the selection or the layout of its contents constitute intellectual creations, are protected as such. Nonetheless, the protection of a database does not include the protection of the data or information compiled. The protection awarded to databases does not apply to software that is used in the production or in the operation of the databases.
Moreover, said law determines that personal and non-personal data that forms part of the databases, can be used only in the following cases:
a) In the case of information classified as accessible.
b) When there is express authorization by the owner of the information.
c) When expressly authorized by law.
d) When it is mandated by court order or the order of any other authority with the power to do so.
e) When requested by institutions governed by public law for the performance of their respective powers or the corporate purpose for which they were incorporated.
What key protections exist for personal data?
In Ecuador, personal information or data is protected under the Constitution, which recognizes and guarantees the right of every person to the protection of data of a personal nature. As a result, said information can only be accessed through the express authorization of its owner.
Currently, there is no specific law that regulates personal data in Ecuador. Nevertheless, the right is protected and regulated through the Constitution of the Republic of Ecuador, the Organic Telecommunications Law, the Organic Knowledge Social Economy Code and the Organic Transparency and Access to Public Information Law.
Accordingly, the Organic Telecommunications Law establishes that telecommunications services providers are prohibited from executing or omitting actions that violate the right to the protection of personal data. In other words, causing the destruction, loss, tampering, disclosure or unauthorized access of personal data transmitted, stored or processed in the provision of the telecommunications services.
Personal data delivered by users to the providers of telecommunications services cannot be used for sales promotion of services or products, even by the operator itself, unless by express authorization of the user.
Along the same line, the Organic Transparency and Access to Public Information Law regulates the exercise of the fundamental right of every person to access information, and classifies confidential information as personal information of the citizen product of its personal and fundamental rights.
Furthermore, as previously stated, the Organic Knowledge Social Economy Code establishes that personal information contained in databases cannot be disclosed, unless there is express authorization by its owner.
Presently, there is draft bill called “Law that regulates hate and discrimination acts in social networks and the Internet”, which was introduced before the National Assembly on May 23, 2017. The scope of the law is to regulate the actions of service providers that operate through telematics communications, Internet platforms or technologies of a similar nature, which allow users to share with others or publicly disseminate content, and that reach a hundred thousand registered users in the Republic of Ecuador.
This draft bill also determines that the providers of social networks must assign a home or local agent, who will be responsible for the compliance of obligations regarding the treatment of content and information that may constitute discrimination or hate acts.
Are there restrictions on the transfer of personal data overseas?
First, as previously stated, there is no legislation that specifically regulates personal data; however, the protection of personal data is right of the citizens enshrined in the Constitution. Thus, and based on the legislation referred to above, personal information can only be transmitted overseas with the previous and express authorization of its owner. It is important to note that the consent must be free of vices.
What is the maximum fine that can be applied for breach of data protection laws?
As set forth in the Organic Integral Criminal Code, personal data is afforded protection from the criminal law. The fore mentioned law establishes that the person that access, intercepts, examines, retains, records, reproduces, discloses or publishes personal data, data, voice, audio and video messages, postal consignments, information contained in computer storage media, private or reserved communications of another person by any means, without consent or legal authorization, is punishable with imprisonment from one to three years.
In addition, the person whose personal information was disclosed is entitled to initiate damages claims against the natural or legal person that disclosed the information.
Are there any restrictions applicable to cloud-based services?
There is no legal restriction applicable to cloud-based services, since there is no specific legislation in Ecuador that regulates the matter.
Are there specific requirements for the validity of an electronic signature?
Under the Ecuadorian legislation, an electronic signature is the set of data in electronic form, attached to or logically associated with, a data message, and that can be used to identify the signatory in relation to the data message and to indicate the signatory’s approval and recognition of the information contained in the message. An electronic signature has the same validity and legal effects of a handwritten signature in relation to the data contained in written documents, and it is admissible as evidence in court.
To obtain an electronic signature valid in Ecuador, it is necessary to obtain the certificate of the electronic signature, which certifies the link of the signature with a particular person, through a verification process that confirms the identity.
The electronic signature is obtained through information certification bodies that are one-person businesses or legal persons that issue the electronic signature certificates, and that can provide other services related to electronic signatures. Said bodies must have an authorization by the ARCOTEL.
In the event of an outsourcing of IT services, would any employees, assets or third party contracts transfer automatically to the outsourcing supplier?
Starting on May 2008, with the enactment of Constituent Mandate No. 8, outsourcing and subcontracting or the precarization of labor relations in any form of core business activities of the company or employer was prohibited in Ecuador. As a result, labor relations must be direct and bilateral between employee and employer.
The law establishes that third companies can provide specialized technical services, meaning that said companies must have their own infrastructure and personnel and their activities must be different from the corporate purpose of the beneficiary of the service. As such, in Ecuador transferring employees to a telecommunications service provider, for example in the for of managed service contract, can be considered an infringement of the fore mentioned legislation, given that for the delivery of the service the provider would need to rely on the employees of the user.
Additionally, at the time of the provision of the specialized technical service, it is important that a labor relationship is not created between the employees of the provider and the beneficiary, in order for it not be considered outsourcing. For a labor relationship to exist, the following elements must be present: 1) lawful and personal services; 2) relationship of dependency and subordination; 3) salary.
A breach of this provision results in the imposition of a fine between three and twenty basic unified salaries of a worker in general.
Therefore, a third party that provides its services to telecommunications operators, can do so provided that it has its own personnel, dully trained, and that it can be evidenced that it meets the requirements of a technically specialized service as described above.
With regards to the transfer of assets for the provision of information technologies services, it is absolutely possible to do so without any restriction, based on the principle of party autonomy, which we suggest be contained in the contract that regulates the obligations and rights of the parties that allows the provision of the services.
If a software program which purports to be an early form of A.I. malfunctions, who is liable?
Artificial Intelligence is not regulated in Ecuador; therefore, in case of malfunction of a software program, liability will depend on the obligations of each of the Parties agreed to in the contract, based on the principle of party autonomy. As such, if the contract determines that the software developer will be responsible for its functioning, it is the developer who will be liable for compensating the damages caused by the malfunctioning of the system.
Accordingly, each contract will determine the degree of responsibility agreed to or even a limitation to it.
What key laws exist in terms of obligations as to the maintenance of cybersecurity?
Cybersecurity does not have a specific legal framework in Ecuador; nonetheless, it is protected through Article 178 of the Integral Criminal Code, that determines:
Art. 178.- Invasion of Privacy.- A person that access, intercepts, examines, retains, records, reproduces, discloses or publishes personal data, data, voice, audio and video messages, postal consignments, information contained in computer storage media, private or reserved communications of another person by any means, without consent or legal authorization, is punishable with imprisonment from one to three years.
This provision is not applicable to the person that discloses audio and video recording where he or she personally intervenes nor when it refers to public information as provided for in the law. (emphasis added)
What key laws exist in terms of the criminality of hacking/DDOS attacks?
As in the case of cybersecurity, there is no specific law that regulates the criminality of hacking; however, as mentioned in the previous subsection, article 178 of the Integral Criminal Code could be applied in the case of hacking attacks.
What technology development will create the most legal change in the jurisdiction?
From our point of view, the development of artificial intelligence will undoubtedly be the technological development that will create the most legal change in the Ecuadorian legislation, since it have implications on the treatment of labor law, commercial relationships, civil and tort law, intellectual property. Above all, it will be necessary to determine up to what point can determined tasks be performed through artificial intelligence developments, and its responsibility before users, employers and third parties.
Which current legal provision/regime creates the greatest impediment to economic development/ commerce?
In our opinion the legal framework or provision that to a degree limits, hinders or impedes the economic and commercial development of the country is the Constituent Mandate No. 8, whose purpose is to eliminate and prohibit outsourcing and subcontracting, as well as, any form of precarization of labor relations of the activities that a company or employer conducts.
In Ecuador there is a clear protectionism of the worker, which has impeded that certain types of contracts in the field of telecommunications be implemented. Such is the case of the managed services contract, through which a telecommunications services provider delivers network operation services with the personnel of the contracting party. This type of contract that has been implemented in several countries worldwide cannot be applied in Ecuador, precisely because of the labor restrictions that forbid the outsourcing of personnel. Several companies in Ecuador have been strongly penalized for similar conducts, and for this reason telecommunications operators and their providers have placed special emphasis in not implementing this type of contracts.
Additionally, the referred labor legislation has resulted in the increase of personnel costs of the companies, for both telecommunications operators and its providers, given that the impossibility of outsourcing tasks entails the need to have more workers on payroll. Telecommunications operators in the country place great care in avoiding the creation of a labor relationship between them and the employees of their providers, so a to prevent possible claims, lawsuits or fines that may arise as a result of the outsourcing of services to third parties.
Do you believe the legal system specifically encourages or hinders digital services?
Strictly speaking, the Ecuadorian legal system does not hinder digital services. Yet, because of the lack of a specific legislation that can be applied to digital services, this leaves them scarcely regulated, which to some extent can bring about confusion as to their use, application and delivery.
To what extent is the legal system ready to deal with the legal issues associated with artificial intelligence?
As of today, in the Ecuadorian legal system there is not specific law that regulates aspects of or issues associated with artificial intelligence. Moreover, from our legal perspective, Ecuador is not prepared to deal with legal issues related to artificial intelligence, since that would mean it would need to create and amend a number of laws in order to regulate its application, uses and protection. However, artificial intelligence is a subject that every day gains more force and importance around the world, which is why Ecuador will eventually find itself in a position where it needs to enact legislation that regulates said matter, specially taking into account that artificial intelligence will be an issue that will have a great impact in society.