A report by Noerr Group from Germany, indicates that digitalisation poses a challenge for the law. It is important to keep an eye on rapid technical developments in an ongoing exchange between legal practice, policy-makers and academia. The legal departments must be involved in digital business strategy formulation and guide C-Level executives on the changing landscape of the digital economy. Advising on aspects of contract law, in the areas of development cooperation, allocation of rights, measures to protect confidentiality, outsourcing/ cloud computing and insurance solutions are very important and must be revisited regularly.
Business firms may find themselves liable for damages amounting to millions of dollars or pounds, as in the case of Diageo, a British multinational alcoholic beverages company which was accused of a breach of contract by German software company SAP. The issue was over SAP vendor license fees, and because Diageo allowed an integrated third-party cloud based software to indirect access to their SAP database. Of interest was that the type of indirect usage did not even exist at the time the two parties signed their contract in 2004. Technology is changing faster than legislation, so how do you deal with this?
A digital‐era business strategy requires a legal understanding of: the principles of platform business models, the power of ecosystems effects, indirect and direct collaboration between firms in the digital era and digital value models. Legal teams must determine the likelihood of a non-compliance event occurring and the associated magnitude of the risk. According to Noerr Group, data law (data protection, data/IT security, rights to data, cyber-crime), contract and liability law as well as IP law are essential areas for action. Shared use of computing resources over a distributed computer network needs a closer look at. Let’s look at some regulatory bodies and areas of focus in some regions.
Legal focus in digital over region:
In South Africa, the focus is on data law, with POPI which is the Protection of Personal Information Act. It protects the rights of consumers’ data and protection from misuse by other organisations on the web and via digital commerce platforms. Granting the owner of personal information, certain rights of protection and the ability to exercise control of their information given to third parties.
The International Telecommunications Union (ITU) is a United Nations organisation which specializes in information and communication technologies – ICTs governance. Covering areas such as intellectual property (IP) rights, patents, copyrights, social networking sites and user-generated content, film and software. The ITU also looks at the implications for regulators, fostering international cooperation between governments (Member States) and the private sector (Sector Members, Associates and Academia) on a wide range of issues affecting the future direction of the ICT industry.
UK and US
In the UK, business models utilizing digital technology are being challenged by lawmakers, a new law was enacted by Parliament, called the Digital Economy Act 2017. Focus is on data rights, data security, regulation of advertising and algorithms used by digital business. Consumer and age protection on the web as well as terrorism security are major areas included in the act.
In 2014 U.S. National Institute of Standards and Technology (NIST) released a plan for implementing the U.S. government’s 2011 Cloud Computing Strategy. NIST promotes consistent standards for cloud computing terminology and practices. Cloud computing is a major concern for legislators, as new developments on its technology such as Internet of things, mobility are adopted in multiple industries. The public and health sectors collect and store sensitive client data to the cloud which needs protection and legal remedies in case of breaches.
At the the Institute for Digital Business Strategy (IDBS) we explore all aspects of the digital economy for your business and individuals as part of digital business strategy. Register for free membership by email @ email@example.com
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