There are a broad range of interesting developments in this area. We have written recently on the implementation of the NIS2 Directive which we believe will have a significant impact on businesses. We have also informed clients on further developments as regards the AI Act which was finalised in May. Our Employment and Pension Benefits practice group have written a brief note in this Tracker on employment rights in relation to the AI Act and, as matters unfold, more aspects affecting a range of practice areas will emerge. Finally, in the increasingly active space of regulation of digital privacy and related rights, the Data Protection Commissioner has published its annual report for 2023 and we have written a short summary of our views. We have pointed to the fact that, not surprisingly, 2023 “saw a significant increase in complaints dealt with by the DPC, with record fines issued and corrective orders imposed following cross-border and national inquiries”. There is no doubt that the influence of developments from the EU is of great importance in this area and we have commented on the large number of data protection-related judgments from the Court of Justice of the European Union ("CJEU"). We have written previously on some of these decisions.
Matheson Insights
NIS 2 – Essential and Important Information for Essential and Important Entities
EU Agrees Landmark AI Act: What Do Businesses Need to Do Now?
ACTS COMMENCED SINCE THE SPRING HORIZON TRACKER
Consumer Rights Act 2022
Date signed into law: 7 November 2022
This act consolidates and updates existing consumer protection laws that regulate consumer contracts, as well as introducing new and enhanced consumer protection measures, particularly in the area of digital goods and services. The act gives effect to a number of EU consumer rights directives, including, inter alia, the following:
- DireCtive 2019/770 on certain aspects concerning contracts for the supply of digital content and digital services (The Digital Contents Directive)
- Directive 2019/771 on certain aspects concerning contracts for the sale of goods (The Revised Sale of Goods Directive); and
- The main provisions of Directive 2019/2161 on the better enforcement and modernisation of EU consumer protection rules (The Omnibus Directive). This Directive itself amends the Unfair Contract Terms Directive 93/13/EEC; the Unfair Commercial Practices Directive 2005/29/EC; the Consumer Rights Directive 2011/83/EU, and the Price Indication Directive 98/6/EC.
Latest stage: The whole act, other than s.161, has been commenced. There has been no update since the Spring Horizon Tracker.
Online Safety and Media Regulation Act 2022
Date signed into law: 10 December 2022
This act provides for the establishment of a Media Commission, Coimisiún na Meán, and the dissolution of the Broadcasting Authority of Ireland. The legislation introduces a regulatory framework for online safety to tackle the spread and amplification of harmful online content, as well as updates to the regulation of audiovisual media services and the implementation of the revised Audiovisual Media Services Directive. The act provides, in particular, for Coimisiún na Meán to make online safety codes to be applied to designated services. In May 2024, Coimisiún na Meán published an details of an updated Draft Online Safety Code in response to the public consultation.
Latest stage: The act was partially commenced on 15 March 2023 by SI 71/2023 but a number of sections await commencement.
IRISH PROPOSED LEGISLATION
Communications (Retention of Data) Bill
This bill will consolidate and replace the current Communications (Retention of Data) Act 2011 to reflect advances in technology and consolidate the law on retention of and access to data for national security and prevention of crime purposes.
Latest stage: Heads of bill in preparation.
National Cyber Security Bill
This bill will establish the National Cyber Security Centre of Ireland ("NCSC") on a statutory basis and provide for related matters including clarity around its mandate and role. It will also transpose the NIS2 Directive into national law.
Latest stage: Work is underway. Listed for priority drafting for the Summer Legislation session 2024.
Criminal Justice (Protection, Preservation of and Access to Data on Information Systems) Bill 2024
This bill proposes to give effect to those provisions of the Council of Europe Convention on Cybercrime 2001 not already provided for in national law in order to enable ratification of the Convention.
Latest stage: Pre-legislative scrutiny was completed in March 2024. General Scheme published in May 2024.
Interception of Postal Packets and Telecommunications Messages (Regulation) (Amendment) Bill
This bill proposes to amend various pieces of legislation in respect of electronic communications.
Latest stage: Work is underway.
EU DIRECTIVES AWAITING IMPLEMENTATION
NIS2: Directive on Measures for a High Common Level of Cybersecurity across the Union
Date published: 27 December 2022
This proposed revision to the Network and Information Security Directive (Directive (EU) 2016/1148) ("NIS2") will strengthen the security requirements, address the security of supply chains, streamline reporting obligations, and introduce stricter enforcement requirements, including harmonised sanctions across the EU to address the growing threats posed by digitalisation and the surge in cyber-attacks. Once adopted, it will replace Directive 2016/1148.
Transposition date: 17 October 2024. The National Cyber Security Bill that will transpose NIS2 into national law is listed on the Government Legislation Programme for Summer 2024. Heads in preparation.
EU REGULATIONS
Data Act
Procedure reference: 2022/0047/COD
Date published: 23 February 2022
This regulation (Regulation (EU) 2023/2854) aims to increase legal certainty for consumers and businesses to access data generated by the products or related services they own, rent or lease. It will maximise the value of data in the economy and establish fairness by putting in place rules on the use of data created by Internet of Things (“IOT”) devices and related services.
Latest stage: Published in the EU Official Journal on 13 December 2023, and entered into force on 11 January 2024. It will apply from 12 September 2025.
Digital Operational Resilience Act ("DORA")
Date published: 27 December 2022
This regulation (Regulation (EU) 2022/2554) is designed to consolidate and upgrade Information and Communications Technology ("ICT") risk requirements throughout the financial sector to ensure that all participants of the financial system are subject to a common set of standards to mitigate ICT risks for their operations. DORA aims to ensure that all participants in the financial system have the necessary safeguards in place to mitigate cyber-attacks and other risks. It will also introduce an oversight framework for critical ICT third party providers, including cloud service providers.
Latest stage: Published in the EU Official Journal on 28 December 2022, and entered into force on 16 January 2023. It will apply from 17 January 2025.
Data Governance Act
Date published: 3 June 2022
The purpose of this regulation (Regulation (EU) 2022/868) is to establish a framework to facilitate general and sector-specific data-sharing (including data of public bodies, private companies and citizens). The regulation provides for:
- A reuse regime for certain categories of public sector data
- A framework for data intermediation services which aims to establish commercial relationships for the purposes of data sharing between data subjects, data holders and data users
- Contribution to data altruism and the creation of common safeguards to increase trust in recognised data altruism organisations
S.I. No. 272/2024 EU (European Data Governance Act) Regulations 2024 give effect to the Data Governance Act. In particular, they seek to establish a framework for the sharing of "categories of protected data" held by public bodies as set out in Chapter 2 of the Data Governance Act.
Latest stage: Published in the EU Official Journal on 3 June 2022, and entered into force on 23 June 2022. It applied from 24 September 2023.
Digital Services Act ("DSA")
Date published: 27 October 2022
This regulation (Regulation (EU) 2022/2065) is one of two legislative initiatives announced by the Commission as part of the European Digital Strategy, “Shaping Europe’s Digital Future”, announced in December 2020, which aims to upgrade the rules governing digital services in Europe. It is intended to update the eCommerce Directive and regulate the provision of digital services by: (i) online intermediaries; (ii) hosting services; (iii) online platforms; and (iv) very large online platforms (“VLOPs”) and very large online search engines ("VLOEs") ie, online platforms and search engines that reach 45 million or more average monthly users in Europe.
Latest stage: Entered into force on 16 November 2022. It applied from 17 February 2024, except for certain provisions applicable to VLOPs and VLOEs. The DSA started applying to VLOPs and VLOEs four months after their designation as same by the European Commission (i.e. since the end of August 2023).
The Irish Government have also published a Digital Services Act 2024, which came into effect on 17 February 2024. The Act provides for the implementation of supervision and enforcement provisions of the DSA in Ireland. In particular, it designates Coimisiún na Meán as Ireland's Digital Services Coordinator. Coimisiún na Meán shall therefore be responsible for all matters relating to the supervision and enforcement of the DSA in Ireland, and for ensuring coordination at national level in respect of those matters. The Act also designates the Competition and Consumer Protection Commission ("CCPC") as the competent authority for purposes of Articles 30 to 32 of the DSA which relates to the supervision and enforcement of online marketplace obligations.
Digital Markets Act ("DMA")
Date published: 15 December 2020
This regulation (Regulation (EU) 2022/1925) is part of the European Digital Strategy, “Shaping Europe’s Digital Future”, announced in December 2020 which aims to upgrade the rules governing digital services in Europe. This regulation will create harmonised rules defining and prohibiting certain unfair practices by “gatekeeper” platforms (providers of core platform services) and introduces a new competition tool to deal with structural competition problems across markets which cannot be tackled or addressed using existing competition rules. The measures include new powers for the Commission to conduct market investigations.
Latest stage: Published in the EU Official Journal on 12 October 2022, and entered into force on 1 November 2022. Most of the DMA provisions applied as of 2 May 2023.
EU DRAFT LEGISLATION
ePrivacy Regulation
Procedure reference: 2017/0003 (COD)
Date published: 10 January 2017
This proposal forms part of the EU Digital Single Market Strategy. The proposed regulation has been amended on a number of occasions. An update to the 2002 Marketing ePrivacy Directive was seen as necessary to address new technological and market developments as well as the emergence of new techniques for tracking users’ online behaviour. The proposed ePrivacy Regulation will repeal the 2002 ePrivacy Directive and will complement the GDPR.
Latest stage: First reading in the Council. Some technical progress made under the Swedish Council Presidency up to June 2023.
EU Cyber Resilience Act
Procedure reference: 2022/0272/COD
Date published: 15 September 2022
This regulation introduces cybersecurity requirements for products with digital elements. It aims to bolster cybersecurity rules to ensure more secure hardware and software products.
The proposal aims to ensure better protection for consumers through increasing the responsibility of manufacturers by obliging them to provide security support and software updates, and providing them with information about cybersecurity of the products they buy and use. The regulation would provide a single set of rules for cybersecurity for companies in the EU. It aims to decrease the number of cybersecurity incidents and increase the transparency and trust of consumers, and better protect their data and privacy.
Latest stage: Trilogue negotiations took place on 27 September 2023, 8 November 2023, and a provisional agreement was reached on the text during the third trilogue on 30 November 2023. At the Council, the Coreper confirmed the agreement in December 2023. This was approved by the ITRE committee of Council in January 2024. The text was approved by Parliament as a whole on 12 March 2024 and will need to be formally adopted by Council before it can enter into force.
Artificial Intelligence Act
Procedure reference: 2021/0106 (COD)
Date published: 21 April 2021
This regulation establishes a common regulatory and legal framework for artificial intelligence ("AI") within the EU. In proposing a regulatory framework on AI, the Commission has identified the following specific objectives:
- to ensure that AI systems placed and used on the EU market are safe and respect existing law on fundamental rights and EU values;
- to ensure legal certainty to facilitate investment and innovation in AI;
- to enhance governance and effective enforcement of existing law on fundamental rights and safety requirements applicable to AI systems; and
- to facilitate the development of a single market for lawful, safe and trustworthy AI applications and prevent market fragmentation.
While acknowledging that AI is a fast-evolving and strategic technology with tremendous opportunities, the Commission believes that some uses of AI pose specific significant risks to the application of various EU rules designed to protect fundamental rights, ensure safety and attribute liability.
Latest stage: On 8 December 2023, provisional agreement was reached following informal trilogue negotiations between the Council, Parliament and Commission. The AI Act was formally adopted by Parliament in its March 2024 plenary session (with a corrigendum issued in April 2024). The Council endorsed the final text in May 2024.
The AI Act will soon enter into force, i.e. 20 days after its publication in the EU’s Official Journal. It will be fully applicable 24 months after its entry into force, except for bans on prohibited uses of AI (which will apply six months after entry into force); general-purpose AI rules (12 months after entry into force); and obligations for high-risk AI systems as part of safety components in regulated products (36 months).
AI Liability Directive
Procedure reference: 2022/0303/COD
Date published: 28 September 2022
The purpose of this directive is to address shortcomings in liability rules where AI systems are used, setting out standardised rules for access to information and easing the burden of proof in relation to AI claims.
Current liability rules, particularly fault-based rules, are not suitable for handling AI liability claims. Because of the complex nature of AI, specifically the so-called "black box" effect, it is difficult for victims to successfully prove the requirements for their claims. To help claimants overcome the challenges in establishing a causal link between fault, based on non-compliance with duty of care requirements, and output by AI systems, a 'presumption of causality' is introduced in the proposal. The presumption is rebuttable however and claimants are required to meet a number of conditions such as demonstrating that the output produced by the AI system gave rise to the damage in question. In cases where high-risk AI is involved, claimants will also have a right of access to information from companies.
Latest stage: First reading in the Council.