it & technology law news

Update 10/04/2020

Der Nationalrat hat unter anderem im Zuge der COVID-19-Gesetzgebung mehrere gesellschaftsrechtliche Maßnahmen im Rahmen eines sog. gesellschaftsrechtlichen COVID-19-Gesetzes (COVID-19-GesG) beschlossen.

Croatia stepped into the regulation of virtual currency business

Legal basis

The new Croatian Anti-Money Laundering Act (OG no. 39/2019; "Cro-AMLA") implemented the 5th EU Anti-Money Laundering Directive. As of 1. January 2020 Cor-AMLA sets forth the new requirements to service providers with respect to virtual currencies.

The Corona pandemic is putting our world to an unexpected stress test. But despite all difficulties, in only a couple of weeks, people dramatically changed the way they work, shop, seek health care, and interact with each other. 

More and more companies are using digital signatures to sign their contracts electronically. But is this permissible and are the contracts valid?

Freedom of contract (Vertragsfreiheit) is an underlying principle of Austrian contract law. A contract is defined as consenting declarations of an offer and an acceptance and, in general, neither offer nor acceptance requires a specific form under Austrian law. Moreover, oral agreements are legally binding and enforceable. Contracting parties are therefore free to choose any suitable form for a contract according to Section 883 of the Austrian civil law (Allgemein Bürgerliches Gesetzbuch, "ABGB"), including tools to sign contracts electronically. This possibility to choose is called freedom of form (Formfreiheit), which is part of the mentioned freedom of contract ("Vertragsfreiheit").

The Fiaker, a Viennese term for a horse-drawn four-wheeled carriage for hire (a "hackney coach"), has been trundling through the streets of Vienna for centuries. The first Fiaker was licensed in 1693. Back then, it was the first means of urban transportation to carry several passengers at once. Today, it is a tourist attraction and traffic obstruction. Nonetheless, the Fiaker survived and adapted. Just recently, the first electronic Fiaker hit the road in Vienna.¹

It is heralded that the future of urban transportation lies in the third dimension: up! Soon drones will usher in a new era of urban aerial mobility. With the U-Space initiative, the European Commission established a process to develop a new regulatory framework that would enable complex (civil)² drone operations in all types of operational environments within the single European Sky airspace.³ This new EU framework must be widely implemented by EU Member States starting from 1 July 2020 and is fully applicable to all civil drone operations as of 1 July 2022.

In January 2020, the Czech data protection authority (ÚOOÚ) published on its website an anonymised inspection protocol, which contains valuable information on how the authority assess checking and reading employee emails after the GDPR came into effect.

In the case in question, the authority received a complaint which reads that "… after an employee leaves, his e-mailbox, which contains both working and private data, is handed over to such employee’s supervisor, who has a full access to the e-mailbox, administers it and uses it…". The authority initiated an investigation in which it expressed (and protocoled) its opinions on accessing employee mailboxes. 

The most liveable city in 2019¹, Vienna provides incentives for more environmentally friendly mobility by using a motion-tracking and blockchain technology² based app. The culture-tokens can be traded in for culture services (i.e. free entrance into certain cultural institutions). The pilot project so far includes four cultural institutions in Vienna and will be rolled out for a six-month test period beginning on 26 February 2020. It is planned for the app to go into full operation this autumn.

Gone are the days when purchasing new software was mainly the job of procurement departments and driven by economic considerations. Nowadays, IT projects are incredibly complex and require the seamless interaction of many different stakeholders.

On 10 December, experts from both legal practice and academia spent the evening at the "Lawyer vs. Robot: A lost cause?" event which is part of the event series TECHNOLOGYLEGAL, a collaboration between Professor Christian Piska from the University of Vienna, and Christian Schmelz, partner at Schoenherr Vienna.

Just in time for Christmas, the European Commission's Expert Group published its eagerly awaited final report on regulatory obstacles to financial innovation on 13 December 2019 (the "Report").

The Sale of Goods Directive will apply to sales contracts between a consumer and a seller for goods, including goods with a digital element (e.g. smart TVs, smart fridges or smart watches) regardless whether concluded physically in shops or online.

On 6 November 2019, the German Cartel Office and the French Competition Authority published a joint report on the competition risks resulting from the use of algorithms (the "Report"). The Report tackles four main issues:

The latest criminal statistics of the Austrian Interior Ministry show a strong growth of cybercrime: In the first half of 2019, the Austrian police recorded over 13,000 cybercrime offences, compared to around 8,700 in the same period last year. Combating cybercrime is therefore becoming more and more relevant, in particular for companies to protect their business secrets.

Am 21. November fand die zweite "Tech Night @ Schönherr" statt. Die von der Schönherr Technology & Digitalisation Gruppe ins Leben gerufene Eventreihe befasst sich mit rechtlichen Rahmenbedingungen und Herausforderungen im Kontext aktueller digitaler und technologischer Entwicklungen.

"When I think about all the different ways that people interact privately, I think payments is one of the areas where we have an opportunity to make it a lot easier," Zuckerberg said on 30 April 2019 at Facebook's F8 annual software developer conference in San Jose, California.

As of November 2019, the Polish Data Protection Authority (Urząd Ochrony Danych Osobowych; "UODO") has fined three Polish companies and one local government institution for non-compliance with the GDPR.

The Electronic Notarial Form Foundation Act (Elektronische Notariatsform-Gründungsgesetz) ("ENG") came into force on 1 January 2019 and enables going forward the digital foundation of an Austrian limited liability company ("GmbH") by way of an electronic notarial deed. The Austrian notaries were entrusted with the implementation of the digital foundation procedure. Since autumn 2019, the first notaries in Austria have been offering the digital foundation process of a GmbH. Schoenherr attorneys at law, was the first person in Austria to accompany a digital foundation process.

Before we describe the digital foundation in practice, we briefly describe the notarial process of founding a GmbH in general: (i) execution of the deed of incorporation / articles of association as Austrian notarial deed (Notariatsakt), which essentially requires that the notary reads out the agreement and the parties sign the agreement in front of the notary, (ii) appointment of the first managing director(s) by way of a shareholders' resolution (by way of a notarial protocol, circular resolution with certified signatures or – as this is done in practice – as part of the notarial deed described under (i)), (iii) execution of the specimen signatures of the managing director(s) with their signatures being certified by a notary public (this could also be done by a foreign notary or an Austrian embassy/consulate) and (iv) execution of the commercial register filing again with signatures being certified by a notary public or Austrian embassy/consulate.

The ENG now attempts to fully digitalize such process. The process in practice can be described as follows:

1. New Data Protection Law adopted and applicable

After a public hearing that lasted more than a year, the National Assembly of the Republic of Serbia adopted the new Data Protection Law (the "Law") on 9 November 2018. The Law is applicable as of 21 August 2019. The provisions of the Law itself have been modelled on, and largely comply with the provisions of the GDPR, as part of the wider process of harmonising the national law of Serbia with EU law, which was one of the main reasons for the adoption of the new Law. Besides many novelties, the new Law elaborates on certain procedures, rights, obligations and competences.

Some of the most important novelties follow.

On 11 July 2019 the Austrian parliament adopted the EU-Finanz-Anpassungsgesetz 2019 ("EU-FinAnpG 2019") which implements the 5th EU Anti-Money Laundering Directive ("5^th AML Directive") into Austrian law and introduces a number of amendments to Austrian laws relevant to the financial market.

In order to implement the 5^th AML Directive, amendments to the Austrian Financial Markets–Money Laundering Act ("FM-GwG"), the Beneficial Owner Register Act (WiEReG) and the Act on Gaming (Glückspielgesetz), are necessary. These amendments include changes which will have a significant impact on business with virtual currencies.

Schoenherr has advised the shareholders of the Synergis Informationssysteme GmbH ("SynerGIS") on the sale of its GIS (geographic information systems) and FM (facility management) software development business to AED-SICAD GmbH ("AED-SICAD").

Read the Czech version below.

There are two fundamental legal mechanisms stipulated in the EU law for the transfer of personal data outside European Economic Area (EEA): Standard Contractual Clauses (SCCs) and Privacy Shield. Both of them are widely used in practice because they allow corporations within the EEA to legitimise the transfer of personal data beyond the borders of EEA. However, each of them behaves differently. SCCs are essentially contracts between (at least) two parties and a Privacy Shield on the other hand is an agreement between the United States Department of Commerce and the European Union, which regulates the transatlantic data transfers.

The Court of Justice of the European Union (CJEU) is prepared to hear a case challenging the validity of both of the above-mentioned transfer instruments. The case stems from a dispute between Max Schrems and Facebook dating back to 2013. Max Schrems is an Austrian lawyer and determined advocate for data protection. His focuses on the flow of (EU) personal data from US corporations to U.S. intelligence agencies. In 2017, Schrems set up a non-profit organisation NYOB¹ with the aim to help citizens defend themselves against allegedly “omnipresent” technological corporations.

Am 8. Mai fand die erste Technology Night @ Schönherr statt. Der Abend hielt für interessierte Zuhörer Keynotes und Panel-Diskussionen zu trending Tech-Themen bereit.

Challenges and opportunities for organisations developing, deploying and using AI

On 8 April 2019, the High-Level Expert Group on Artificial Intelligence – a supportive body to the European Commission – launched their "Ethics Guidelines for Trustworthy AI". Based on four questions, the following text deals with the context and content of this guideline, deducing the possible next steps for AI practitioners towards the achievement of Trustworthy AI.

As reported by ORF and CNBC, the taxi drone EHang 216 conducted its first demonstration flight in Vienna on 4 April 2019. EHang 216 is an autonomous aerial vehicle that can seat two passengers, reach a speed of up to 160 km/h and has a range of around 70 to 80 kilometres. The vehicle is electrically operated, and efforts are being taken to ensure it is barely audible at a distance of 15 to 20 metres. Thus, the taxi drone sets a remarkable benchmark in terms of air pollution control and aircraft noise.

1. The 5G network for Europe

In September 2016, the European Commission invited¹ the Member States to develop national 5G strategies as part of their broadband plans. The Austrian Federal Government has set itself the goal of implementing the 5G strategy in three ambitious phases:

Phase 1: By mid-2018, preliminary commercial 5G tests were to be implemented.

Phase 2: By the end of 2020, the Federal Government set its interim goal of achieving almost nationwide availability of ultrafast broadband connections.

Phase 3: By the end of 2023, 5G services will be available on the main traffic connections, and by the end of 2025, the goal of almost nationwide availability of 5G will be achieved.

At the beginning of March 2019, the competent supervisory authority (RTR) conducted the procurement procedure for the 5G "pioneer band" auction. The three major Austrian mobile operators (A1, T-Mobile and Drei) acquired licences for the frequencies in all 12 regions put to tender. Based on these frequencies, one of the companies has already commissioned the first 5G mobile stations in some selected Austrian regions.

On 26 March 2019, the Austrian mobile operator T-Mobile commissioned the first 25 5G mobile stations in 17 selected Austrian municipalities, predominantly in rural areas. According to the Chancellor of Austria, the start of 5G marks a milestone in the country's economic competitiveness and technological progress.

However, further steps need to be taken to achieve almost nationwide availability of 5G by the end of 2023 as laid down in the Federal Government's 5G strategy paper.

Introductory remarks:

• So far, the Austrian Data Protection Authority ("DPA") did not impose significant fines under the GDPR
• The majority of its decisions had been remediation orders
• This excerpt of the DPA's decisions under the GDPR forms a summary per March 2019 of its in our view most relevant decisions
• Despite some of those decisions had been contested and appellate proceedings are still pending this excerpt shall give an impression of the DPA's views and considerations under the GDPR

Imagine your car would drive you instead of you driving your car. This marvel has become partly a reality, as a law entered into force on 11 March 2019 allowing autonomous driving on Austrian highways. In addition, an amendment to the regulation for autonomous driving (Automatisiertes Fahren Verordnung – AutomatFahrV) by the Ministry of Traffic, Innovation and Technology broadly permits autonomous parking of vehicles.

Blockchain and Artificial Intelligence (AI) are the new giants in technology and two of the hottest topics at the moment. The two technologies are typically considered for separate applications but there is a link: data.

AI allows processing of big data, whereas Blockchain offers security, immutability and decentralised data storage. It makes sense to combine the two technologies to make "Smart Contracts smarter" and to potentially also be a driver of the fourth industrial revolution: Data owners might be able to control their data again by choosing which AI provider to share their data with. Data marketplaces might also be possible, boosting AI applications when combined with Blockchain technology.

Schoenherr is sharpening its focus on technology & digitalisation matters by establishing a dedicated, firm-wide technology & digitalisation group.

Blockchain1 or Distributed Ledger Technology has become a trending topic especially in the light of cryptocurrencies, smart contracts, ICOs and other areas in the context of digitisation, which are based on this technology. This technology and the (alleged) possibility to digitalise any kind of assets or create bullet-proof sets of data has the potential to revolutionise certain industries. It is therefore essential to understand blockchain technology in order not to fall behind. The following is a brief introduction to the technology, its variants, advantages and possible applications.

The law firms Dorda, Eisenberger & Herzog, Herbst Kinsky, PHH, Schoenherr, SCWP Schindhelm and Wolf Theiss, today launched the Legal Tech Hub Vienna (LTH Vienna). 

Schoenherr and CONDA AG ("CONDA") have succeeded in digitalising the shares of the joint stock company and enabled registered shares to be managed via blockchain technology. 

Schoenherr is announcing the promotion of Austria IP lawyer Michael Woller and Czech corporate/M&A expert Vladimír Čížek to contract partner. 

Mit Beginn des neuen Geschäftsjahres steigt Michael Woller (35) zum Contract Partner bei Schönherr auf.