An important case before the ECJ that could have major legislative implications for Austria, a draft law regulating whistleblowing, and a major data center acquisition – the hottest topics in Austria right now, according to Baker McKenzie Partner Lukas Feiler.
“This June saw an interesting case make its way to the ECJ – a case that could have significant legal implications, based on how it is resolved,” Feiler begins. As he reports, the case concerns the “country of origin principle and the extent to which member states can regulate online platforms that are based in another member state. We have been representing two of the three online platforms that pled their case before the Austrian Administrative Supreme Court, before being diverted to the ECJ,” Feiler explains.
“This case raises two interesting questions,” Feiler continues. “The first one is whether, under the country of origin principle of the EU e-Commerce Directive, a member state is in a position to adopt laws that regulate entire categories of online platforms that are established in another EU member state,” he reports. The other question is “more of a procedural one, yet still highly relevant.” According to Feiler, if a member state finds itself in a position to regulate an online platform established in another EU member state (the “country of origin”), the EU e-Commerce Directive requires – even in cases of urgency – that the country of origin is notified in the shortest possible time. The question for the ECJ to answer is whether a violation of this procedural requirement renders the respective national legislation inapplicable. “Many EU members are very active when it comes to regulating international online platforms; however, notification requirements under EU law are often not complied with,” Feiler explains.
Furthermore, Feiler reports that Austria is in the process of implementing the Whistleblowing Directive, but that it is “very much behind the curve here. The current draft law is, more or less, a minimal implementation of the directive itself.” Feiler stresses that a major question here is to what extent will the “law be limited to violations of EU law or whether it will cover compliance violations more broadly.”
Finally, Feiler reports a major transaction currently ongoing in Austria. “In what is probably the largest outsourcing deal in the last five or ten years, the ARZ data center – used by two of the largest Austrian banks as well as a number of smaller players in the financial services industry – is being sold to Accenture,” he reports. “We have been working on behalf of Accenture on the acquisition as well as negotiating new services agreements. This deal is quite important given the implications for the landscape of the financial services industry,” Feiler says, stressing the importance of technology in the value proposition of financial services. “It has become evident that Austrian banks have recognized that they cannot implement the required levels of innovation on their own, so this deal is rather indicative of the times we live in,” Feiler concludes.