It has been said that there’s nothing in life that does not mingle with the law and true to the adage, the area of information technology is no different. Technology firms all over the world are statutory required to meet legal compliance in order to be recognized as legitimate.
The real perplexing issue baffling a lot of minds both in the tech and legal fields is the ever disconnected and disynchronized legal regime governing information technology. The IT world is always on a constant metamorphosis.
The nature of technology is that, a form of technology that is new and post modern today quickly becomes replaced with an even better form of technology making the previous redundant and archaic almost instantly. While the nature of the law is that it is stable and not easy to change for it to be certain and reliable.
It’s got everything to do with privacy
Compliance issues need to be considered on a country-by-country basis whereby most of this tech firms know no boundaries and hence the nightmare being experienced by these ever thriving tech firms.
The first European Union Data Protection Directive was promulgated in 1995 and has never been amended or updated to cover any progression in the IT world. These emerging technologies require a new and relevant regulation in order to be effectively governed. But it’s not all sad and gloomy any more since new draft regulations have been in the pipeline and due to be operational as from the year 2017. This new piece of regulation has undergone a couple of amendments and is widely expected to capture and meet the demands of the current and emerging issues in the world of IT.
If tech firms will not have complied with the new set of regulations before the lapsing of the grace period, they will be faced with another form of conundrum that will expose them to fines or suspension of licences.
Legal compliance is not a cheap affair and so is dealing with the consequences of non compliance.
As businesses are always trying to outdo each other, their cut throat competition always tempts them to tilt regulations to their favour.
A case in example is Uber, a German firm that got banned for not complying with passenger carriage rules. Its business model is not envisaged by the current regulatory framework. Pundits wait with bated breath to see whether the yet to be unleashed laws will accommodate contemporary business models.
Essential technology services
The FCA is increasingly interested in the extent to which firms abide with the outsourcing requirement in the FCA Handbook.
The aim of these obligations is that firms befittingly handle operational risk associated with their use of third parties and that such arrangements do not prejudice the FCA’s competence to administer.
What about Taxes?
Another regulatory issue that tech firms need to be aware of is the changes in the tax regime. Taxes are known to change almost every year depending on a myriad of ever changing factors. Tech firms also need to be on the lookout in order to change their financial approaches.
Tax formulas that take advantage of lacunas in the legal construction of international tax instruments will face the full force of the law. The CFA called upon Working Party 11 (Aggressive Tax Planning), to perform the duty under the BEPS Action Plan.
The BEPS action plans are:
- Neutralising the Effects of Hybrid Mismatch Arrangements
- Strengthening CFC rules
- Limiting Base Erosion via Interest Deductions and Other Financial Payments
- Requiring Taxpayers to Disclose their Aggressive Tax Planning Arrangements
Legislators have to put in time and resources to guarantee that regulations befit current and future tech needs in the digital sp