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16 December 2021
Schoenherr publication

to the point: technology & digitalisation | December 2021

Welcome to the December edition of Schoenherr's to the point: technology & digitalisation newsletter!

We are excited to present a selection of legal developments in the area of technology & digitalisation in the wider CEE region.

Insights waiting for you in this edition: 

Our practice group threw an internal Christmas party on 14 December 2021. While the pandemic again compelled us to hold it virtually, we still made it special by visiting a virtual museum in the metaverse. For those of you who have not yet heard of the metaverse, I recommend the following video: The metaverse may change our future, our society and how we interact, just like social media did. For now, we shared a look at virtual art of the Francisco Carolinum Linz and visited the exhibition of our partner Guido Kucsco , where a 64.7 kg granite stone inscribed with gold letters is represented as a digital piece of art. It exists both digitally as an NFT and physically at the museum in Linz. It was an unusual Christmas party, but it is possible that in the years to come meeting up in a virtual world will become common place. You will definitely hear more about the metaverse in 2022, including in this newsletter, where we will continue discussing interesting technology-related legal developments.

Thank you for following us in 2021 and please continue to do so next year. We wish you a great holiday season, a Merry Christmas and a Happy New Year! Thomas Kulnigg on behalf of all Schoenherr technology experts.

In the US, WhatsApp users will now be able to send crypto assets pegged to the US dollar to other users for the first time by using the Novi wallet to send and receive money via WhatsApp. This makes sending money to family and friends "as easy as sending a message," according to Stephane Kasriel, who runs Novi and used to work at PayPal and Upwork. The stablecoin used is not the company's own stablecoin Diem (not yet on the market) but the Pax Dollar (USDP), which is issued by the US company Paxos. In the US, things are already heating up for stablecoin providers. It looks like the financial authorities only want to allow the issuance of stablecoins pegged to the US dollar to those companies that also obtain a banking licence or are in possession of one.

Nowadays, many people are looking to make quick money in crypto. Driven by FOMO (fear of missing out), a large number of people are investing without sound knowledge in all kinds of projects promising hefty returns in a short time.

But uninformed investors are easy prey for those seeking to exploit that lack of knowledge. This has given rise to a whole new generation of scams and frauds. Victims of crypto theft and fraud are often confronted with the irretrievable loss of their assets.

This is where Insider Risk, an Austrian start-up specialised in cybersecurity and investigations, comes into play. If you are a victim of financial or crypto fraud, Insider Risk offers you the best and most target-oriented methods to clarify the facts as quickly and objectively as possible. With their state-of-the-art technology, Insider Risk is able to trace crypto transactions back to their endpoints and in many cases help you recover your lost assets. For more information, check out their website [here] – link:

Fun coins or meme coins, which were originally created to make fun of cryptocurrencies and their investors in general, have now developed into serious speculative instruments on the crypto market. The two most famous ones, "Doge" and "Shiba Inu", currently have a market capitalisation of over EUR 40bln.

An Austrian satirical magazine has now jumped on this trend. Unlike its famous forerunner, the magazine did not name the coin after the former head of the Republic of Venice, but after the now Austrian ex-finance minister Gernot Blümel – the "Blümel Coin". Since it is a satire coin, the corresponding whitepaper follows suit. Accordingly, it is an ERC20 token that was set up on the Ethereum blockchain. In total, there is one Blümel for every Austrian, i.e. 8.92 million. However, since the whitepaper states that the distribution should be as unfair as possible, the first 89,200 people will receive 100 Blümel as a gift via an airdrop. All you need is a Metamask wallet with some Ethereum. While the issue via Airdrop is free of charge, at present approx. EUR 30-40 in Gasfees are to be paid for the transaction. Even though this is a satire project, the former finance minister will now always be associated with "proof of work" – the consensus mechanism of the Ethereum blockchain – and is forever immortalised on the Blockchain.

Behold! European Commission decisions of less than 100 pages do actually exist. The recently published 53-page non-confidential version of its Car Emissions Cartel decision (Case AT.40178 – Car Emissions) proves it. In it, the European Commission ("EC") found that three German car manufacturers coordinated to limit technical development and competition on innovation in diesel car emission cleaning technologies and fined them no less than EUR 875m. Correspondingly, the EC published a side letter to the parties in which it gives guidance to the companies on aspects of their technical cooperation, which – from the EC's perspective – raise no competition concerns. We have read through the decision as well as the side letter and summarised the most important points for you (see here). Spoiler alert for golf enthusiasts: Carrying golf bags in diesel cars will become somewhat more difficult in the future...

On 30 November 2021, the EU Council and the EU Parliament reached an agreement on the EU Data Governance Act (DGA). The DGA promotes the availability of data and aims at building a trustworthy environment to facilitate its use for research and foster innovation with the EU. With this agreement the trilogue negotiations have been concluded, meaning that the final approval of the legal text by the European Parliament and the Council seems near. The DGA is the first step of the European data strategy, which aims to shape the EU's digital future.

In particular, the DGA aims to facilitate data sharing of open government data (i.e. public sector data), including health and environmental data, for the purpose of reusing it for research and innovation. It also fosters data sharing of individuals and companies for the common good.

To achieve this goal, the DGA introduces data intermediates, which will provide a secure environment for companies or individuals to share data without fear of its misuse or of losing their competitive advantage. Data intermediates need to be listed in a public register. The "data marketplaces" are not allowed to use those shared data for any other purpose and the data sharing services will be placed in a separate legal entity. They also need to ensure that access to their service is fair, transparent and non-discriminatory, also with regard to pricing, for both data holders and data users. This means that such data intermediaries will be neutral. 

The DGA also establishes data altruism: individuals and companies will be able to make their data available for reuse for the common good, voluntarily and without financial reward. Altruistic organisations must be non-profit and operate independently. They also must comply with certain transparency requirements and will need to be registered and monitored in their Member States.

The recitals of the DGA emphasise the strong potential in the use of data made available voluntarily for purposes of general interest, such as healthcare, combating climate change, improving mobility, facilitating the establishment of official statistics or improving the provision of public services. Thus, the concept of data altruism will contribute to the emergence of data pools big enough to enable data analytics and machine learning, also across borders within the EU.

In the next step along the European data strategy path, the EU Commission will also propose a "Data Act" to encourage data sharing among businesses and between businesses and government.

On 25 November 2021, all 193 member states of the UN Educational, Scientific and Cultural Or-ganization (UNESCO) adopted an agreement that defines the common values and principles re-lated to the "healthy" development of AI.

As explained by UNESCO: "We see increased gender and ethnic bias, significant threats to pri-vacy, dignity and agency, dangers of mass surveillance, and increased use of unreliable Artificial Intelligence technologies in law enforcement, to name a few. Until now, there were no universal standards to provide an answer to these issues."

That is why the main goals of the adopted agreement include protecting data, banning social scoring and mass surveillance, helping to monitor and evaluate, and protecting the environ-ment.

It is the first UNESCO global normative framework, giving its member states the responsibility to apply it at their level. Member states will receive UNESCO's support implementing the rules and should report regularly on their progress and practices.

Austrian COVID-19 legislation allows corporate bodies to meet virtually instead of in person. Since the begin of the pandemic, MS Teams, Zoom and many other online communication tools have become an indispensable part of daily business for shareholders and board members. However, the possibility to hold virtual meetings is still based on temporary legislation whose validity would have expired at the end of this year. 

In light of the current situation, the Austrian legislator is now in the process of extending the possibility to hold virtual meetings by six months until 30 June 2022. Despite this extension, the legislator made clear in an explanatory note that virtual meetings should only be understood as an option for corporate bodies, which is solely justified by the pandemic. According to this explanatory note, in-person meetings have proven their worth in the past (e.g. in the protection of minority shareholders' rights) and remain the starting point for further potential discussions on the general admissibility of virtual meetings post-COVID-19.

The new Regulation on European Crowdfunding Service Providers (ECSP) has applied to crowdfunding services related to business financings of up to EUR 5m since 10 November 2021. The regulation lays down uniform rules for ECSP (i.e. platform operators) across the EU, including harmonised licensing requirements. On this basis, the regulation also introduces an EU passporting regime, removing a major hurdle faced by ECSP seeking to offer their services cross-border. Moreover, the regulation provides for an aligned and enhanced investor protection framework. The new rules are expected to increase financing opportunities available for SMEs and provide investors with more choice as well as more legal certainty when investing cross-border.

We tried to establish how many antitrust cases are currently pending worldwide against GAMA (Google, Amazon, Meta, Apple) and counted over 60. This considerable number does not come as a surprise bearing in mind that the Digital Markets Act, one of the most important legislative projects in the history of digital regulation, is not only on everyone's lips but in the final stages of legislation right now. And there's news: in less than a year (!), the European Council and the European Parliament's (EP) Internal Market Committee (IMCO) reached an agreement on their drafts. This is impressive and a testament to the political significance of this issue. While the IMCO made a whopping 1,199 (passionately debated) amendments to the European Commission's first draft, the European Council remained rather conservative and showed little inventiveness by contributing only a few suggestions. The EP will still have to vote in plenary in December, but the two drafts should allow for trilogue negotiations between the European Commission, the EP and the European Council to kick off at the start of next year. Subsequently, the final version of the drafts could be adopted as early as the first half of 2022. We are looking forward to an exciting New Year of possibilities (and rules)!

The Digital Content Directive[1] ("DCD") and the Sale of Goods Directive[2] ("SGD") will finally come into force and harmonise warranty rules within the European Union. In Austria, the centrepiece of this legislative reform is the Consumer Warranty Act (Verbrauchergewährleistungsgesetz; "VGG"). While you might think that your company will never have to deal with warranty claims, there are still some novelties accompanying the VGG that you should know about. By way of example, the VGG explicitly addresses personal data as consideration and distinguishes digital services not only from other services but also from goods with digital elements. Despite their digital element, the latter are treated as goods. Further, the VGG introduces an update obligation for providers of digital services: to keep the provided digital content/service in conformity, updates must be provided. Since those changes will come into force as of January 2022, we have summarised the most significant changes for you here: [Link to blog].


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

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