Category: News

Four (More) Areas of the European Digital Market to Be Impacted by Future Regulation

In a recent article, we discussed four new European regulations impacting the digital market from 2021 onwards. While these pieces of regulation exist and produce effects already or will start producing effects in the months to come, there are other areas of concern for the European regulators that will receive increasing attention in the near future.

1. Data Governance

A draft proposal for a regulation on data sharing in the European Union was published for consultation this November 2020. This regulation aims to facilitate the exchange of data between public and private sectors withing all Member States and increase trust in data sharing within the EU.

This regulation has the potential to boost the re-use of data available in the hands of public actors which is normally protected by an available form of confidentiality, by other business and not-for-profit actors. These vast amounts of data can prove decisive in training AI models for various applications, can be poured into various R&D projects or help drive European or nation-wide public policies.

It also introduces the concept of data altruism as a new type of consent for the use of protected data (personal or otherwise) without reward for general interest.

2. The Common European Health Data Space

In February 2020, the EC published its European strategy for data in which digital health sector, including healthcare and medical devices, was specifically addressed. To remove the fragmentation between the Member States in the health sector, the EC proposes a Common European Health Data Space, supporting the idea of a single market for data.

Just like the Data Governance Act, this proposal is based on the use and re-use of data, in this case, health data, which is extremely important for innovation in the healthcare sector, for improving accessibility and effectiveness of the healthcare systems and the competitiveness of the European industry. Although such system brings numerous benefits to society in general and individuals in particular, all use and combination of health data within Europe will have to include adequate safeguards in compliance with, among other, the provisions of the GDPR.

3. Artificial Intelligence – White Paper and & Consultation Report

This year, the EC kick-started the process for a regulation on AI with the White Paper on Artificial Intelligence – A European approach to excellence and trust, together with a series of accompanying documents, including the aforementioned European strategy for data and a Report on the safety and liability implications of Artificial Intelligence, the Internet of Things and robotics. The documents discuss the objectives of a potential regulatory framework and address many potential risks and concerns related to the use of AI.

The White Paper on AI is the first step to start the legislative process, being a document used by the EC to launch a debate with the public, other stakeholders, EU Parliament and the Council to reach a concrete proposal for a European approach to AI. According to the EC, the main risks identified concern the fundamental rights, including data privacy and non-discrimination, and safety and liability issues. Taking this into account, the EC concluded that a new regulation specifically on AI is necessary to address these risks.

Following a period of consultation concluded in June 2020, a report was published summarizing the opinion of over 1,200 respondent from a broad spectrum of stakeholders. The report showed that the respondents were concerned, inter alia about AI potentially breaching fundamental rights, AI leading to discriminatory outcomes or posing a safety risk. Almost 75% of the respondents opined that regulators need to issue new regulations or strengthen existing ones to tackle the identified risks.

Among the high-risk application areas of AI, the respondents identified the defence sector (autonomous weapons), remote biometric identification and surveillance, healthcare, critical infrastructure, human resources and employment.

4. Crypto-Assets & Digital Operational Resilience

Two new regulation proposals, Regulation on Markets in Crypto-Assets(“MiCA”) and Regulation on digital operational resilience for the financial sector, published in September 2020, aim to establish a harmonized EU regime for the regulation of crypto-assets and to reduce ICT risk in the financial sector as well as to overcome regulatory fragmentation in this field among the Member States and sub-sectors.

MiCA concerns cryptocurrencies not presently included in general regulation, establishing separate frameworks for three categories of crypto-assets: e-money tokens, asset-referenced tokens and other crypto-assets, as well as a new subset of crypto assets, the so-called „stablecoins”, which recently emerged and attracted the attention of both the public and regulators around the world.

The proposal for a Regulation on digital operational resilience for the financial sector introduces an oversight framework to cover critical third-party information providers and communications technology services, including cloud service providers, as well as a ban on using critical ICT third-party service providers established outside the EEA.

Four new European regulations impacting the European digital market in 2021

+++ BONUS: THE DIGITAL SERVICES ACT PACKAGE

The regulation of the European digital market is a constant preoccupation of the European Commission. Be it for the increase of the consumer welfare, as the Commission claims, or for setting roadblocks on the path of the technology powerhouses to dominate the European digital space, as the industry claims, here are the most important European regulations that will shape the European digital market in 2021.

1. Audiovisual Services – Keeping Up with New Video Content Distribution Models

The 2018 Audio Visual Services Directive[1] is already here and brings significant changes for linear broadcasters and on-demand service providers, providing minimum harmonization standards. One of the most notable change brought about is the introduction of rules regarding video sharing platforms, which will be subject to stricter obligations to protect viewers, especially minors, from harmful content in the online world and will be required to take appropriate measures to protect individuals from incitement to violence or hatred and content constituting criminal offences (in essence, a public provocation to commit terrorist offences, child pornography and racism/xenophobia).

Despite the implementation deadline of 19 September 2020, Romania is still to present for public consultation a draft implementation law.

2. European Electronic Communication Code – Consolidation and Reform

In December 2018, the first the European Electronic Communications Code (“EECC”) was adopted[2], representing a far-reaching reform of the European framework in the field of electronic communications. The notion of electronic communications service was expanded to incorporate the evolutionary changes in the sector, leading to more and more service providers being subject to the provisions of EECC (e.g. interpersonal communications services provided over the internet, such as Whatsapp, are now included in the electronic communication services).

EECC must be transposed by the Member States until 21 December 2020. In Romania, the draft implementation law is currently under debate and, with the deadline just around the corner and a Parliament in the making, it is unlikely that the implementing law will be adopted in time.

3. Expanding Consumer Rights in the Digital Space

2019 Digital Content Directive[3] and 2019 Sale of Goods Directive[4] aim to reduce transaction costs for businesses by aligning the EU legislation and to increase the level of protection and legal certainty for consumers when buying from across the EU. These come in addition to 2019 Platform-to-Business Regulation[5] which deals with the relationship between platforms and their business users, which came into effect in July 2020.

While the Sale of Goods Directive applies to sale contracts between a consumer and a seller for goods, including goods with a digital element (e.g. smartwatches, smart TVs etc.), while the Digital Content Directive applies to contracts concluded between a consumer and a trader which supplies digital content or digital services. The definition of “digital services and digital content” covers, inter alia, social media services, software as a service and various computer applications. However, certain services, such as healthcare, financial services and open-source software, are expressly excluded. A very important aspect is that the Digital Content Directive also applies when the consumer provides its personal data as payment in return for the digital content or service. The question of contract validity, in this case, is, however, left to the national laws.

Both directives must be adopted by the Member States before July 1, 2021, and shall apply from 1 January 2022.

4. Biggest Overhaul in Copyright Laws for 20 Years

The 2019 Copyright Directive[6] is the biggest overhaul of European copyright laws since 2001 in view of increased cross-border use of digital content. The new rules provide increased protection for authors and artists while opening new possibilities for accessing and sharing copyrighted content online across the European Union.

Online content sharing service providers are greatly impacted by this Copyright Directive. In an unprecedented shift in liability for copyright infringements, content sharing platforms will be, in principle, required to obtain licenses for copyright-protected content uploaded by users, unless certain conditions set out in the Copyright Directive are met. The new rules continue to be subject to intensive debate and the practical implementation of “policing” and rights collection systems is giving the whole industry a big of headache.

The Copyright Directive must be implemented across EU by 7 June 2021.

Bonus: The Digital Services Act Package 

The Digital Services Act (“DSA”) is a legislative package published on 15 December 2020 by the European Commission, which aims to create a modern legal framework for digital services[7]. DSA represents the biggest regulatory reform effort in the sector of digital services since the 2000 E-commerce Directive in 2000 and is aimed at strengthening the Digital Single Market and ensuring that digital service providers in the European Union act responsibly to mitigate risks faced by their users and to protect their rights. It aims to tackle the issues posed by the rising power of internet platforms, especially of the so-called gatekeepers (who, for example, would be required to observe requirements intended to ensure inter-operability with competitors) and marks a return by the European Commission to ex-ante type of measures rarely seen in a couple of decades.

 

[1] The Directive (EU) 2018/1808 amending Directive 2010/13/EU on the coordination of certain provisions laid down by law, regulation or administrative action in the Member States concerning the provision of audiovisual media services (Audiovisual Media Services Directive) in view of changing market realities (“AVMSD”)

[2] Directive (EU) 2018/1972 of the European Parliament and of the Council of 11 December 2018 establishing the European Electronic Communications Code, repealing the provisions of Directive 2002/21/EC

[3] The Directive (EU) 2019/770 on certain aspects concerning contracts for the supply of digital content and digital services;

[4] Directive (EU) 2019/771 on certain aspects concerning contracts for the sale of goods;

[5] Regulation (EU) 2019/1150 of the European Parliament and of the Council of 20 June 2019 on promoting fairness and transparency for business users of online intermediation services;

[6] DIRECTIVE (EU) 2019/790 on copyright and related rights in the Digital Single Market and amending Directives 96/9/EC and 2001/29/EC

[7] https://ec.europa.eu/digital-single-market/en/digital-services-act-package

bpv BRAUN PARTNERS assisted Generali Real Estate Fund in another acquisition of a residential property in Prague

We provided comprehensive legal advice to Generali Investments CEE, an investment company acting on behalf of the Generali Real Estate Fund (Fond realit, otevřený podílový fond Generali Investments CEE, investiční společnost, a.s.), in the purchase of a historic building by acquisition of a 100% ownership interest in SOUKENICKÁ 1086, s.r.o., which owns the property. The building from the early 20th century, which has undergone complete renovation (including a restaurant on the ground floor) is now the third property in the Generali Real Estate Fund portfolio.

Assistance in this matter was provided by our real estate team, made up of partners Gabriela Špak Porupková, Miroslav Dudek and attorney Pavlína Tejralová, and involved performing comprehensive legal due diligence, preparing all transaction documentation and closing the transaction. This is the second Generali Fund acquisition bpv has participated in.

The parties decided not to disclose the value of the transaction.

In addition to bpv BRAUN PARTNERS, Generali received advice from the ASB Group (financial and tax advisors) and Savills Czech Republic (technical advisors).

bpv GRIGORESCU STEFANICA advised SUPERNOVA in relation to the acquisition of Jupiter City Shopping Mall in Pitesti

Supernova acquired the Shopping Mall Jupiter City from Mall Retail Rom, part of Jupiter Group, through a complex business transfer transaction. The acquisition was financed partially from own funds and partially by Erste Bank AG, Austria. The property developer Supernova relied on the legal advice of bpv GRIGORESCU STEFANICA for this acquisition, including for due diligence, contract negotiation for the business transfer and for the financing documentation.

The bpv GRIGORESCU STEFANICA team was led by Anca Albulescu (Partner) and included Nicolae Ursu (Managing Associate) and Diana Radu (Associate).

“We have made an excellent decision when choosing bpv GRIGORESCU STEFANICA to advise us on this transaction. Although the deal had some legal hurdles and we also had to face restrictions due to the Covid-19 situation across Europe, Anca, Nicolae and Diana guided us sure-handedly through our first acquisition in Romania and helped us getting the deal through in a short period of time As we are following a growth path in retail sector we are looking forward to next transactions.”, declared Johannes Wurzer, Head of Mergers and Acquisitions at Supernova.

“We are honored and pleased to have successfully finalized this mandate for Supernova. It was a complex project, with several challenging aspects. On behalf of the bpv Grigorescu Stefanica team, I would like to thank Supernova for trusting us for their first project in Romania. We look forward to accompanying their future expansion in Romania.”, declared Anca Albulescu.

In addition to Supernova, the client portfolio of our firm’s practice includes prominent names such as Aviva Investors, Commerz Real, CTP, E-Quest Logistics, Erste Group, Hornbach, Immofinanz, Soravia, Tiriac Imobiliare.

***

About SUPERNOVA

Supernova is a leading private real estate company with a buy-and-hold investment strategy focused on high quality retail properties in Central and Eastern European countries with strong macroeconomic fundamentals, broadly dividing their portfolio properties into single-tenant properties (big boxes) and multi-tenant properties (shopping centers and retail parks).

bpv GRIGORESCU STEFANICA advised FORTY MANAGEMENT in connection with the EUR 100M urban regeneration project CENTRAL DISTRICT LAGOON CITY

A multidisciplinary team of lawyers of bpv GRIGORESCU STEFANICA advised the real estate developer Forty Management in connection with the urban regeneration project Central District Lagoon City, to be developed in the northern part of Bucharest.

The bpv GRIGORESCU STEFANICA team was led by Catalin Grigorescu (Managing Partner) and Nicolae Ursu (Managing Associate) and included other lawyers from the firm’s real estate, corporate transactions and technology practices.

This urban regeneration project will be developed on a 39,070 sqm piece of land worth EUR 8.2 million recently contracted with Butan Gas and will have at its centre, as a first in Central and Eastern Europe, turquoise waters and white sands lagoon of over 20,000 sqm. The lagoon is developed under a licence acquired from the U.S. company Crystal Lagoons and will have a zero-energy environmental impact.

„Central District Lagoon City is a project that will redefine the concept of urban development not just in Romania, but in the region. We are proud and honoured to be involved in its development and to support Forty Management, from the project’s inception. Our involvement in this project is a further reinforcement of our strategy to focus on projects that include new technologies at their core, capitalizing on the strengths of our top-tier technology practice”, stated Catalin Grigorescu, Managing Partner of bpv GRIGORESCU STEFANICA.

„Our expertise in commercial transaction in the technology sector and the close cooperation with our real estate team were very important in the negotiation process of the licence agreement with Crystal Lagoons. This agreement is a very long-term commitment with multiple implications including in relation to the rights to own, manage and operate the facilities and the property in which they will be integrated”, added Catalin Grigorescu.

bpv GRIGORESCU STEFANICA advised HORNBACH on site acquisition and development of its newest DIY store in Oradea

The real estate team of bpv Grigorescu Stefanica advised international DIY group HORNBACH in connection with the development of its latest mega-store in Oradea, Romania. The store opened on September 30, 2020, and is Hornbach seventh retail DIY outlet in Romania.

The team of bpv Grigorescu Stefanica was led by partner Anca Albulescu and managing associate Nicolae Ursu and included associates Serban Dumitrescu, Diana Radu and Delia Catrina. This is the third Hornbach store development that this team advises on, after the stores in Sibiu and Timisoara. The team also advised on the sale of Prisma 2 property next to its Balotesti store. The firm advises Hornbach also on corporate, commercial and compliance matters related to its commercial operations.

“We are honoured by the continuous trust Hornbach places in our team and are privileged to accompany them in the most important phase of their expansion in the Romanian market”, says Anca Albulescu.

The real estate team of bpv Grigorescu Stefanica advises on all types of commercial and residential projects and transactions.

bpv GRIGORESCU STEFANICA strengthens its Restructuring and Insolvency Practice with prominent restructuring and litigation lawyer from leading bank

We are pleased to announce that restructuring and litigation lawyer, Remus Rusu, has joined our firm with effect from September 1, 2020.

Remus Rusu has over 15 years of experience as a lawyer, having worked for several banks in Romania. The last 10 years he has spent as a restructuring, workout and litigation lawyer for one of the largest banks in Romania. From his position, he has advised and represented the bank, as a creditor, in significant out-of-court restructurings, as well as formal insolvency proceedings, and has been representing the bank in insolvency litigations related to debtors – legal entities or individuals. Remus will strengthen our firm’s restructuring and insolvency practice where he will work alongside partner Alexandru Rusu on developing the already prominent practice specializing in creditor representation in difficult cases. The practice boasts a first-rate portfolio of international and local clients and experience in some of the most complex insolvency cases of the recent years, including as adviser in an insolvency proceeding and multiple successful international arbitration cases for a top 10 creditor in the largest Romanian insolvency to-date.

“In 15 years as a lawyer in the banking system, I have learned that creditors value working with a multi-disciplinary team with excellent professional capabilities and impeccable ethical values and reputation. I am happy to join such a team.”

“With Remus, we gain a tried professional with an excellent market reputation, who will contribute greatly to the development of our restructuring practice. We are fortunate to have him on-board”, says Alexandru Rusu, head of restructuring and insolvency practice. “We will continue to leverage knowledge with technology to be able to deliver an exceptional service to our clients in an area that is traditionally marked by complexity and lack of transparency”, continues Alexandru Rusu.

Remus Rusu will also support Fractal Insolvency, our related insolvency administration practice, in relation to procedures under its administration.

bpv BRAUN PARTNERS assisted EcoFinance Group in establishing the joint venture Čerstvě utrženo Haná a.s. with the Roman Catholic Archdiocese of Olomouc

bpv BRAUN PARTNERS provided comprehensive legal advice to its client, EcoFinance Group, in establishing a joint venture with the Roman Catholic Archdiocese of Olomouc. The transaction will secure a strategic alliance and cooperation between these two partners in the area of growing vegetables and fruits under the brand name Čerstvě utrženo.

The marketing co-op Čerstvě utrženo was created in 2017 by several Czech farmers with a shared vision: to grow high-quality vegetables and fruit in the Czech Republic, without unnecessary chemicals, in a way that is good for the planet and for people, and to create a brand that will become a symbol of local quality. The co-op is made up of several subjects, including Farmy Kopeček and Agro Haná, which are owned and operated by the innovative family holding ECO Finance Group. At the present time Čerstvě utrženo is made up of tomato farms in Mutěnice, Velké Němčice, Kostelec na Hané and Smržice, a blueberry farm in Hovorany and a blueberry and apricot farm in Velké Bílovice.

ECO Finance Group is now establishing a new entity, Čerstvě utrženo Haná, with investment support from the Roman Catholic Archdiocese of Olomouc. The shared goal is to expand production and build new greenhouses in and around Olomouc to continue providing high- quality local fruit and vegetables for the region and the Czech Republic as a whole. Customers will still find them in stores under the brand Čerstvě utrženo.

“Combining the long years of experience and stability of the Roman Catholic Archdiocese of Olomouc with the modern, innovative approach to growing fruit and vegetables at AGRO Haná a.s. and Farmy Kopeček s.r.o. is going to make them one of the most important agricultural producers in the Olomouc region next year,” comments Marek Jedlička, Chairman of the Board of Directors at Čerstvě utrženo Haná a.s.

The legal team, led by partner David Vosol with the support of attorney Ondrej Poništiak and trainee attorney Filip Baloušek, helped make the transaction go smoothly, including setting up the joint venture and preparing and negotiating all the related documentation.

ECO Finance Group s.r.o. is a fast-growing, innovative holding that invests in agriculture, energy and real estate. It owns and operates 7.5 hectares of greenhouses in the Prostějov region, where it grows different varieties of premium tomatoes in order to supply local, fresh and high-quality fruit and vegetables to all available chains and thus contribute to the food independence of the Czech Republic.

In its move to self-financing, the Roman Catholic Archdiocese of Olomouc is entering into business ventures in order to secure its primary religious activities and charitable activities in social care. Given its history, it prefers to invest in forestry and agriculture, but is also opening up to more modern forms of those industries. It places great emphasis on the ethical nature of its investments.

bpv GRIGORESCU STEFANICA assisted Romanian start-up INNOSHIP on its Seed financing from venture capital fund GapMinder VC

We are pleased to announce that a team including Catalin Grigorescu, partner and head of technology practice, and Radu Zmaranda, CIPP/E, associate, advised Innoship Technology and its founders on their seed financing round from GapMinder VC. This builds upon our firm’s work for the founding team since the inception of the business in 2019.

The Seed Investment round received from GapMinder VC will accelerate the growth of Innoship and will speed up the development of new functionalities for its platform. Innoship enables retail businesses to integrate and orchestrate multiple last-mile delivery options. Through advanced machine-learning algorithms, Innoship optimizes the interactions between retailers and carriers, streamlining the costs of courier services and increasing delivery performance through a dynamic allocation of the orders according to the criteria selected by the retailer.

„Being a young technology company, it was particularly important for us to find the best business and legal advice for our seed financing round. With their no-nonsense approach, Catalin and his team were able to turn an otherwise fairly complex process into a smooth journey for us.‟ declared Daniel Nicolae, Co-founder and CEO of Innoship.

The team will continue to advise Innoship on its expansion while Catalin Grigorescu will act as a strategy and business advisor for the company.

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