Innovation Law Insights

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What is the EU AI Act and what does it change?

The AI Act is EU’s first piece of legislation on the use of AI. Giulio Coraggio, Location Head of Intellectual Property and Technology at DLA Piper, discusses what the Act provides for and how companies should prepare to comply with it. Watch the video here.

Artificial Intelligence

Meta pauses its plans to train AI models with users’ personal data

Meta has agreed to pause using Facebook and Instagram user data to train AI following concerns from several data protection authorities.

Meta had planned to use posts and photos from Instagram and Facebook users to develop and train its AI models, excluding data from users under the age of 18. The company claimed the legal basis for this processing was "legitimate interest" and allowed users to object to the use of their content.

All across Europe, Meta's plans faced widespread criticism. For example, the organisation NOYB filed complaints with 11 European data protection authorities, highlighting that Meta's new privacy policy allows the company to use all public and non-public user data collected since 2007 for any current and future AI technology, without specifying the purposes. This includes data from inactive accounts and additional information from third parties or online sources. NOYB also noted that the "legitimate interest" legal basis had previously been rejected by the Court of Justice for advertising purposes. The Norwegian data protection authority had already objected to the legal basis in a public statement, in which it argued that consent from data subjects would have been a more appropriate legal basis. Finally, NOYB criticized Meta for making the opt-out process overly complex for users, by not allowing them to object, for example, with one click like the “unsubscribe” button in newsletters.

In addition, several European data protection authorities also confirmed that many complaints from data subjects had been filed on Meta’s use of user’s data to train AI models.

The Irish Data Protection Authority (DPC), which is the lead supervisory authority for Meta, as the company is headquartered in Ireland, is in charge of determining whether Meta has violated data protection rules or not. For the time being, the DPC issued a statement welcoming Meta's decision to pause its plans to use public content shared by adults on Facebook and Instagram across the EU/EEA to train its large language model. This decision followed engagement between the DPC and Meta, and the DPC noted it would continue to work with Meta on this issue in cooperation with other EU data protection authorities.

Meta's decision to pause its plans to train AI with user’s publicly available data was also welcomed by other data protection authorities which previously raised concerns as they received complaints from data subjects, including the ICO, the DK Datatilsynet, and the NO Datatilsynet.

Author: Roxana Smeria

Intellectual Property

Unfair play: The cost of piracy and counterfeiting in the world of sport

Major sporting events generate excitement and enthusiasm among fans around the world. But behind this excitement lies a worrying phenomenon: piracy and counterfeiting, which not only harm rights holders but also undermine the economic and social fabric of the EU.

According to a study by the European Union Intellectual Property Office (EUIPO), 12% of European citizens admitted to using illegal sources to stream sports events. This behaviour is even more prevalent among young people, with 23% of 15-24 year olds engaging in such practices. Countries such as Bulgaria, Greece and Spain have the highest rates of sports piracy, with percentages exceeding 20% of the population.

No less worrying is the market for counterfeit sports goods, which causes significant losses for manufacturers, estimated at EUR850 million per year in the EU alone. Not only is this phenomenon damaging to brands and the economy, it also poses a health risk to consumers due to products that often don’t comply with safety and environmental regulations.

With major events like UEFA EURO 2024 and the Paris Olympics this year, the EUIPO has launched the “Play Fair” campaign, encouraging fans to follow events through official channels and to buy only authorised merchandise. This not only guarantees legal support for athletes and rights holders, but also ensures that sport continues to grow in a sustainable and fair way for future generations.

European authorities are stepping up their efforts to combat piracy and counterfeiting by adopting targeted recommendations and using advanced technology to block illegal websites. Operations such as “Fake Star” have already led to the seizure of millions of counterfeit items, demonstrating the effectiveness of international cooperation in the fight against this phenomenon.

As Europe prepares to celebrate its champions at the most prestigious sporting events, it’s essential that all fans play by the rules. Piracy and counterfeiting not only damage the economy and undermine support for athletes, but also threaten the very future of the sport we love. Choosing official channels and authorised products is not only an act of respect for rights holders, but also an investment in maintaining the integrity and growth of sport in Europe and around the world.

Author: Maria Rita Cormaci

Gaming and Gambling

Italian Gambling Authority discloses changes for new regime

The Italian gambling authority held an online session with the current license holders where it clarified some of the changes that will be introduced with the new online gaming license regime.

The new Italian online gambling license regime is expected to be a substantial change compared to the past. Italy already has one of the most complex and structured regimes for online gambling with the platforms exchanging real time messages with the servers of the regulator to monitor the proper performance of the gaming activity. The regime applicable to new licenses will introduce additional obligations to increase the safety of the gambling activity and prevent gaming addiction. This change comes with considerable obligations for operators.

According to the information publicly available, the most relevant changes are:

• The timing of the new tender: The rules of the new tender will be notified to the European Commission and will consequently be subject to the three-month “stand still” period which might extend the time when the tender will be launched. Accordingly, even though all the current remote gaming licenses will expire at the end of 2024, it seems the regulator won’t be able to launch a new tender and award new licenses by that deadline. Besides, for operators that aren’t awarded a new license, it appears that a six-month period will be granted to shut down their operations and return the gaming accounts’ balances to players.
• The required changes to technical infrastructure: The image below shows the new architecture of how the technical infrastructure of Italian licensed remote gambling operators will be structured. Each operator will have its own gaming account system connected to a system managing the gaming activities and to the different platforms relating to each category of game and each provider. The system will be certified both by the regulator, ADM, and by testing labs accredited with the Italian gambling authority. This is the most relevant change that will be introduced and ADM will have to publish technical specifications to provide more details.
• The new regime applicable to shops: New rules will be introduced to regulate shops that sell vouchers to top up gaming accounts, the OVRs. Shops will be enrolled in a registry with ADM, pay an annual fee and be subject to limitations on the amount of deposits per player that can be handled per week. Read more in this article “Italian Gambling Payments Face New Regulatory Hurdles to Be Solved.”
• Prohibitions applicable to skins: Skins will be prohibited, each operator will have a single top level “.it” domain name and an App, while the current regime allows to have a multitude of domain names per license provided that players have a single gaming account per license. This is a considerable restriction that led to major discussions, and some operators whose business is focused on multiple brands are trying to find workarounds.

Author: Giulio Coraggio

Technology Media and Telecommunication

BEREC: Public consultations on IP interconnection, permanent roaming and machine-to-machine communications, and the general authorization regime

The Body of European Regulators for Electronic Communications (BEREC) has recently launched three public consultations concerning IP interconnection, permanent roaming and machine-to-machine (M2M) communications, and the general authorization regime.

Regarding IP interconnection, BEREC has submitted a draft report on the “IP interconnection ecosystem” for public consultation, following its previous reports from 2012 and 2017. In the draft report, BEREC reassesses the conclusions drawn in the 2017 report and evaluates the current state of IP interconnection in Europe, delving into the use of related services. More specifically, the draft report focuses on topics such as wholesale access, wholesale pricing, and service quality. As stated in the press release, BEREC’s analyses reveal that “the IP-IC ecosystem continues to be driven by effective market dynamics and the cooperative behaviour of market players.”

Interested parties can submit their contributions to the public consultation on IP interconnection by July 26, 2024.

A second public consultation launched by BEREC concerns permanent roaming and M2M communications. This consultation focuses on a draft report – formulated based on the results of a previous public consultation initiated in November 2023 regarding M2M communications and permanent roaming – in which BEREC addresses various topics (such as wholesale access, wholesale pricing, and quality of M2M roaming services) and examines potential obstacles for operators in negotiating permanent roaming agreements and the fees applied for such services.

As highlighted in the press release, machine-to-machine communication is anticipated to grow exponentially with technological advancements. It’s used in various sectors, including automotive, construction, building management, aerospace, agriculture, shipping, transport and sensor technology.

Until 23 August 2024, interested parties can provide their input to the public consultation on permanent roaming and M2M communications.

A third public consultation aims to evaluate the effectiveness of the current general authorisation regime and the level of adoption of the BEREC notification model by national authorities. This public consultation focuses on a draft opinion on the implementation and functioning of the general authorisation regime at both national and European levels, which BEREC, pursuant to the European Electronic Communications Code (Directive (EU) 1972/2018), has to provide to the European Commission every three years. Based on this opinion, the European Commission can then publish a report and, if necessary, propose any legislative changes. Through this public consultation on the draft opinion, BEREC seeks the opinions of interested parties regarding:

• BEREC’s assessment of the implementation status of the general authorization regime;
• the existence of any additional issues, beyond those mentioned in the draft opinion, that hinder the proper functioning of the general authorization regime in the EU;
• any suggestions for future adaptations of the general authorization regime.

Interested parties wishing to participate in the consultation on the draft opinion can submit their input by 26 July 2024.

Author: Flaminia Perna, Matilde Losa

Beyond earth: Navigating space legislation and insurance for a sustainable future

The advancement of space technology and exploration is leading to a multitude of legal and regulatory challenges, making it necessary to create a solid framework to govern these activities. Among the crucial elements of this framework is the role of insurance in mitigating risks and ensuring the sustainable development of the space industry.

The proposed Italian law: Compulsory insurance and registration for space objects

Compulsory insurance for private operators engaged in space activities and the registration of all space objects are among the most significant measures that should be included in the draft law on space, currently being drafted by the Ministry of Enterprise and Industry.

The draft law will regulate the authorisation system for space activities carried out by private operators, providing for technical and professional capacity requirements, with a prior assessment of the associated risks. In particular, the definition of rules on liability for damage caused in the context of authorised space activities is at an advanced stage, which will also affect insurance guarantee systems to cover the amount of compensation, and discussions have already begun with the association of insurance companies. All space objects will have to have an identification “plate.” The ministerial drafts also contain the possibility of using certain space infrastructures financed with state and European funds by regulating private access on the basis of the payment of a right of use. The bill will also address the regulation of the installation of gateway stations on the ground and interference with telephone systems. Overall, the bill aims to create a comprehensive framework for the regulation of space activities in Italy, promoting the development of the sector while ensuring safety and environmental protection.

Insurance is essential to support the expansion of space activities by protecting against financial losses and facilitating investor confidence. Specialised insurance companies offer customised policies to cover every phase of space activities: from the design and construction of spacecraft to the operational phase in orbit, mitigating risks related to technical failures, collisions and other damaging events.

Fundamentals of space law and the expanding European framework

The Cold War space race stimulated the development of space law, culminating in the United Nations Committee on the Peaceful Uses of Outer Space. The Committee played a crucial role in the creation of subsequent international treaties, including the 1967 Outer Space Treaty, establishing non-appropriation of space and freedom of exploration by all states, promoting international cooperation and prohibiting hostile activities such as the construction of military bases and weapons of mass destruction.

In addition to international treaties such as the Outer Space Treaty, national laws play a key role in defining the framework within which space activities must take place. Key examples include:

• the US Space Risk Insurance Act (2000), which facilitates the availability of insurance for space activities by providing government coverage for certain types of losses; and
• the European Union Space Insurance Regulation (2006), which establishes harmonised rules for space insurance within EU states.

Regarding the European regulatory framework, the Treaty on the Functioning of the European Union (TFEU) authorises the EU to promote scientific and technical progress in the space sector, industrial competitiveness and policy implementation. Article 189 of the TFEU allows the EU to develop a European space policy, supporting research, coordinating space exploration efforts and establishing a European space programme, while respecting the competences of the member states. The European Space Agency (ESA) plays a central role. It works closely with the EU and is an independent organisation representing the interests of the member states in space projects. On 23 May, the European Council presented a comprehensive plan to consolidate Europe's position as a space power. The document, entitled “Conclusions on Strengthening Competitiveness through Space,” recognises the growing importance of space for the continent's economic well-being, security and global influence. It emphasises the need to cultivate a strong and competitive European space sector: this will involve increasing public and private investment, making space data more user-friendly and accessible for various industries, and supporting startups and innovative companies. A strong and more competitive European space sector, with a focus on private companies, will lead to an increase in commercial space activities (eg space tourism) and this will drive the demand for space insurance to protect private companies against risks associated with space launches, satellite operations and other space ventures.

Future trends

The space industry is experiencing an accelerated growth phase due to technological advancements and growing interest from the private sector. This momentum includes new business opportunities, such as space tourism and mining in space, which raise new insurance challenges regarding passenger safety, environmental risk management and property rights protection. Space insurance will continue to evolve to support this expansion and ensure responsible management of the cosmic frontier.

Author: Alessandra Faranda

Innovation Law Insights is compiled by DLA Piper lawyers coordinated by Arianna Angilletta, Matteo Antonelli, Edoardo Bardelli, Carolina Battistella, Carlotta Busani, Giorgia Carneri, Maria Rita Cormaci, Camila Crisci, Cristina Criscuoli, Tamara D’Angeli, Chiara D’Onofrio, Federico Maria Di Vizio, Enila Elezi, Alessandra Faranda, Nadia Feola, Laura Gastaldi, Vincenzo Giuffré, Nicola Landolfi, Giacomo Lusardi, Valentina Mazza, Lara Mastrangelo, Maria Chiara Meneghetti, Deborah Paracchini, Maria Vittoria Pessina, Tommaso Ricci, Rebecca Rossi, Roxana Smeria, Massimiliano Tiberio, Giulia Zappaterra.

Articles concerning Telecommunications are curated by Massimo D’Andrea, Flaminia Perna and Matilde Losa.

For further information on the topics covered, please contact the partners Giulio Coraggio, Marco de Morpurgo, Gualtiero Dragotti, Alessandro Ferrari, Roberto Valenti, Elena Varese, Alessandro Boso Caretta, Ginevra Righini.

Learn about Prisca AI Compliance, the legal tech tool developed by DLA Piper to assess the maturity of AI systems against key regulations and technical standards here.

You can learn more about “Transfer,” the legal tech tool developed by DLA Piper to support companies in evaluating data transfers out of the EEA (TIA) here. And check out a DLA Piper publication outlining Gambling regulation here, a report analyzing key legal issues arising from the metaverse qui, and a comparative guide to regulations on lootboxes here.

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