Do you believe your legal system specifically encourages or hinders digital services?
Technology (second edition)
We view that the Indonesian legal system is trying to accommodate digital services while providing adequate regulation for e-commerce. In principle, despite some continuing regulatory uncertainty, business players should have some level of comfort entering Indonesian’s e-commerce sector knowing that their presence is acknowledged and sufficiently protected by the law. That level of comfort should contribute to the continued growth of the e-commerce sector as more local and foreign investors enter Indonesia, attracted by the large domestic market.
In general, Dutch law does encourage the provision of digital services by trying to treat digital services – to the extent possible – the same as more traditional “off-line” services. The Dutch government has also undertaken numerous initiatives to stimulate digitalization and to create prerequisites. These prerequisites range from investments in education, IT-Telecom infrastructures, network security and the limiting regulatory burden.
In certain areas, it encourages and in others, not so much. The Internet Act enacted in 2014 brought a very positive legal environment for internet companies, which is positive. Among other provisions, it creates a safe harbor to internet service providers on liability for user-generated content. In addition to the Internet Act, the LGPD will bring clear and specific rules for the processing of personal data by private and public organizations in the country. Another initiative of the Brazilian government is the development of the national plan for the internet of things (IoT), aiming at creating a favorable and safe legal environment for the Industry 4.0.
In terms of protecting IP rights through patents, Brazil still has a huge registration backlog, and a patent may easily take more than 10 years to be granted.
On a general note, the Luxembourg legal system greatly encourages the provision and use of digital services. The Grand Duchy boasts many information highways linking the country to the key European hubs for the digital economy, and has one of the best pools of data centres in Europe. Luxembourg has implemented number of laws governing and encouraging the use of digital services and technology.
Our legal system is aligned with the EU legislation in the field of digital services. At the EU level, as well as in Romania the digital environment is regulated by laws that are currently outdated (see as an example the legislation for the electronic commerce sector, which was enacted in 2000), as well as encompassing many grey areas, since many aspects of the digital environment are largely unregulated. As a consequence, the current frameworks as well as case law fail to provide legal certainty for the development of digital services.
The Spanish legal system enacts laws according to the European Union legal system. Therefore, most of the Spanish regulations have been harmonised according to European Union law. We do not believe our system differs much from others in the EU in this respect.
The Indian legal system creates a conducive environment for the growth of digital services in India.
Currently, the communication/ network infrastructure that facilitates digital services is more tightly regulated than digital services itself. A large majority of digital services continue to be provided without many conditions or restrictions.
Although the Turkish legislation might have difficulties or shortcomings for the recently adopted technologies; legislator and the administration keep closely the developments on the technology market with the intention of creating a productive environment for the digital market.
Digital services are ruled in essence by EU legislation. The provisions set out in Swedish legislation are often of a general character, with supplementary information in the preparatory works. Sweden strives for being in the forefront when it comes to digital services and the legislation is not hindering this development.
The Swedish tech-market has been seen continuous and rapid development for a long time. In 2017 Forbes ranked Sweden as the best country in the world for business. The technology friendly system has enabled many Swedish tech-companies to flourish. In addition to this, Sweden is widely considered to be one of the leading countries in Europe when it comes to technology start-ups.
As for legislative measures that encourages digital services and development, it should be mentioned that it is possible to apply for generous tax deductions for employees working with R&D.
The Swiss regulatory framework encourages digital services, in particular due to the technology-neutral approach of the legislator, thereby allowing for ample room for development for technology driven business models and companies. Hence, there are generally no regulation-induced impediments to technology innovation under current law. Government authorities periodically review developments in technology and generally emphasize the importance of making use of technological progress. Considerable efforts are undertaken to further facilitate lower market entry barriers for technology-driven business models.
Tensions exist among different laws which protect various interests, such as social warfare, freedom of contract, privacy and consumer benefits. As a national strategy, the state encourages the development of the internet and digital service industry which is called Internet Plus. In past a few years, the industry policies and laws favoured enterprises to develop their business in this field. On the other hands, lawmakers nevertheless show concerns that new models of digital services may jeopardize the national security and invade the privacy of individuals. It is not until recently that the legislature and the government have intensively issued new laws, for example, the Cyber Security Law to emphasize the importance of protecting national security and data security and provide clear instructions on how network operators and operators of CII should behave in securing these interests. Further, virtual currency and the services provided for the exchange of virtual currency are illegal in China because they may bring financial risks as recognized by the lawmaker.
Our regime has gradually become more technology friendly as several technologically oriented bill proposals and initiatives have become a reality in the last years, allowing a fundamental change in certain processes and the implementation of digital alternatives on commercial transactions.
For instance, our Federal Commerce Code (Código de Comercio) has been amended, so merchants are entitled to conclude agreements through electronic means, this is, through the exchange of data messages and both, electronic signatures and advanced electronic signatures, granting such mechanisms with the same probative value than autograph signatures provided they fulfill certain requirements. In this regard, we also have an Advanced Electronic Signature Act in force (see question 11 above) that provides legal certainty accordingly.
As to other matters, we have an extremely efficient real-time settlement mechanism created by the Central Bank (“SPEI” for its acronym in Spanish), which enables near real-time interbank money transfers and payments, and has been the driver for innovation, development and adoption of fast, efficient and secure digital payments alternatives, drawing the attention of numerous Fintech players.
This, along with the surge of several new companies that offered funding alternatives through digital means, resulted in the enactment of the Mexican Fintech Act (Ley para Regular las Instituciones de Tecnología Financiera) in effect as of March 2018, which introduced specific regulations for e-money and crowdfunding institutions, as well as cryptocurrencies’ utilization. Such law also introduced novel regulations as regards to financial regulatory sand box, open banking, digital authentication mechanisms, and regtech, among others.
From a tax perspective, it is important to note that the Mexican Tax Administration Service (Servicio de Administración Tributaria), has undertaken a significant digital transformation initiative and has positioned itself as one of the world’s leading tax authorities regarding technology adoption. Their efforts have resulted in the creation and adoption of: (i) digital authentication tools (e.g. tax electronic signature and digital certificates issuance); (ii) electronic invoicing systems; (iii) cloud storage services for taxpayers’ information; (iv) electronic filing of accounting records, returns and other relevant notices; and (v) electronic filing of administrative appeals, among others.
In sum, we believe that the introduction of recent amendments to the regulatory framework, such as the ones described above, among others, along with certain efforts by the authorities to introduce new digital alternatives, will encourage and foster the development and adoption of several digital services.
The development and utilisation of digital services in Malaysia has been strongly advocated by the government. Specific agencies and incentives have been instituted to facilitate the development of the digital economy. The Malaysian Economic Development Corporation (“MDEC”), an agency established under the Ministry of Finance (“MOF”), has been entrusted to develop, coordinate and promote Malaysia’s digital economy, information and communications technology industry as well as to promote the adoption of digital technology amongst Malaysians. Its Digital Hub has been set up to attract technology investments, support local technology innovations and create a sustainable digital ecosystem in Malaysia.
The previous government had revealed various initiatives to accelerate the adoption of digital technology in Malaysia and to boost the digital economy at the 29th Multimedia Super Corridor (MSC) Malaysia Implementation Council Meeting in October 2017. One initiative was the “Cloud-First” strategy, where it would introduce a method of faster delivery of information technology services such as data sharing and online transactions in which resources are retrieved from the Internet through web-based tools and applications, as opposed to direct connections to servers. The then government also planned to develop a National Artificial Intelligence (AI) Framework, an expansion of the National Big Data Analytics (BDA) Framework, to be led by MDEC.
Regulatory and governmental initiatives have been implemented and/or proposed over the past years to facilitate the development of digital services, particularly in the financial technology sector. On 18 October 2016, the Central Bank of Malaysia implemented a regulatory sandbox which aims to enable the experimentation of financial technology solutions in a live environment, subject to appropriate safeguards and regulatory requirements, to encourage and enable experimentation of solutions that utilise technology innovatively to deliver financial products or services.
On 14 February 2018, the MOF launched the National Regulatory Sandbox Initiative to create a brainstorming group consisting of regulators and selected industry players in the agriculture, biotechnology, building, education, energy, finance, food, green technology, healthcare, hospitality, smart city, sports, telecommunications, transportation, tourism, water management and waste management sectors, to enable innovators to experiment and test their technological solutions/products which either require regulatory framework or which may potentially impact a regulatory environment in a conducive space.
Digital services are ruled in essence by EU legislation, which has largely shaped French consumer law over the last twenty years or so. Therefore, national specificities will less be found in the legal system than in the economy.
However, France has recently become an ardent proponent of digital administration, in particular through simplifying and transferring procedures for the internet (for instance, with public procurement platforms and digital invoicing mechanisms) and through disseminating an increasing volume of open data (www.data.gouv.fr).
On the one hand, the guide for cloud computing (Orientierungshilfe – Cloud Computing vom 09.10.2014) provides detailed instructions on how to use cloud-based services which provides much clarity in this area. On the other hand, data protection regulations are very strict, as it will be the case throughout Europe due to the GDPR.
Singapore's legal system encourages the development and use of digital services. Several regulatory and governmental initiatives have been implemented or proposed over the past few years. On 16 November 2016, the MAS issued guidelines for a regulatory sandbox which aims to encourage and enable experimentation of solutions that utilise technology innovatively to deliver financial products or services. New legislation, such as the Cybersecurity Act as mentioned above, is also being developed with the aim of fostering a stronger and more conducive legal landscape for the development of digital services.
From a privacy perspective, Australia's legal system encourages the development of digital services. The Privacy Act 1988 (Cth) has been drafted on a principles basis, meaning the law facilitates advancement in digital services as it is not technologically specific. Furthermore, most potential liability under the APPs can be avoided by an organisation obtaining express consent from the individuals whose personal information it intends to collect, hold, use and disclose. Finally, the Privacy Commissioner is known to approach privacy breaches in a conciliatory manner, and has demonstrated a focus on changing attitudes toward privacy compliance.
From a business perspective, Australia is generally considered a hub for start-ups and scale-ups, with market conditions conducive to innovation and growth. This includes the availability of government grants and tax allowances for innovative projects. Digital services are also becoming increasingly used by government agencies, with the My.Gov platform in particular being pivotal toward this transition.
The U.S. legal system generally encourages the growth of digital services by having a legal climate that supports the freedom of contracting parties to fashion the terms that govern their relationship. The U.S. does not have an excessively burdensome licensing regime for digital services so that there are low barriers to entry and the potential for robust competition. Constitutional first amendment protections encourages the development of digital services by mandating that any regulation must be content neutral.
Recently, the FCC rolled back its "net-neutrality" regulations that were designed to ensure non-discriminatory access to network infrastructure, and regulatory agencies greenlit mergers that have resulted in a greater concentration of digital service providers. Whether these developments have anti-competitive effects in the digital services market remains to be seen.
While there exist certain issues in the legal system that could hinder digital services to some extent (see question 18), the Japanese government has adopted, and continues to consider, various measures to change the legal system to encourage digital services. For instance, the Regulatory Sandbox was introduced as one of the measures under the Act on Special Measures for Productivity Improvement for the purpose of allowing businesses to conduct demonstration tests and pilot projects quickly and collect data that may contribute to regulatory reforms.