Core legal issues impacting the technology sector in 2021
Core legal issues impacting the technology sector in 2021
In Singapore, the technology sector is growing at a speed of light. Occupying the top spot as a potential world-leading technology hub, the country is well on track to develop to its finest. More than 270 venture capitalists and over 4,000 tech startups are testament to its strength in research and development, creating significant opportunities for Singapore to keep evolving as a smart nation.
A prime location within Asia, paired with a stellar IT infrastructure, makes Singapore a hotspot for investments, even during the world’s most devastating pandemic. What ensures the integrity and reliability of the position is Singapore’s robust regulatory framework that governs the activities of the sector.
As we move towards a future of ever expanding technologies, what are the significant touchpoints that call for greater legal awareness?
Data privacy & security
Technology has perpetuated the collection of data to unprecedented levels, which calls for discourse on privacy and security issues. As advancements grow, so do the requirements for better protocols to ensure minimal risks of data breaches. The 80% of high-risk data security issues in government agencies, which have been rectified, indicate the need for greater security awareness to actively overcome loopholes in a progressively technological era.
Stronger encryption processes and more robust cybersecurity measures will continue to remain topmost priority for a technology-driven economy. It cannot be any truer with the series of hacks we have witnessed, including the nation’s worst involving SingHealth and its technology provider, IHiS.
The Personal Data Protection Commission has been set up to safeguard our systems against cyber criminal acts as well as address and penalise corporations for lapses causing data breaches. Technology innovators in Singapore will therefore need to self-govern as they venture towards creating greater technological possibilities, the finer details of which a corporate lawyer can lay out. This is not only pertinent to preventing security lapses but also the unlawful collection and illegal use of data, whether intended or unintended, in the course of developing, testing and using the technology.
A segment of the Singapore economy that has greatly benefited from tech advancements is digital payments. Going cashless is not just critical for improved user experience. It is also a prime characteristic of an advanced smart nation. However, players in the fintech sector must stay aware of caveats that may interfere in the success of their inventions.
The first uncovers the issues pertaining to contracts between companies and financial institutions providing the digital payment infrastructure. Both parties must stay in line with regulatory obligations of either, and this must be laid out descriptively in contracts. While the Payment Services Act regulates digital and virtual payments in Singapore, companies operating outside of the formal banking system are not subjected to the higher level of strictness that banks are. This may draw risks of criminal acts such as money laundering, personal data breaches and cyber hijacks that can compromise the entire financial ecosystem. Being on the same page when it comes to regulatory requirements and adherence from the point of contract is critical to safeguarding the integrity of these infrastructures.
2. Consumer protection
The safety and security of digital payment systems go hand in hand with consumer protection. Since data is generated from the user endpoint, fintech players cannot think of system integrity without considering privacy. Companies in the mobile payment space, including application providers like PayPal, must continue to build consumer trust. This requires them to be clear and concise in their terms and conditions clauses, and provide clear definitions of expectations and responsibilities on the part of both the consumer and technology provider.
Whether it is to pay for services in-app or remit money overseas, the rise of digital payment entices developers to tap on the wave and create novel technologies. With these developments comes the ownership of patents. Obtaining patents for technological inventions become necessary to protect one’s creation, but with the competitive nature of the fintech sector, disputes may occur, especially since these applications rely on software-heavy technology. Patent infringements and therefore litigation can ensue. These bring about a set of issues in itself.
One, larger companies with greater bargaining power in terms of resources and experience are more likely to win in cases of intellectual property infringements. This means that smaller fintech companies have more at stake when developing their digital payment technologies, which necessitates a detailed understanding of the laws that govern intellectual property. Second, there is no worldwide patent solution, which requires filing patents in specific countries for overseas protection. One can also file a single international patent under the Patent Cooperation Treaty (PCT) and be covered by some or all of the PCT contracting states. Digital payments transcending geographical boundaries means more attention to global coverage of intellectual property is required to protect inventions. Intellectual Property lawyers with depth and breadth of the landscape will benefit such companies navigating the intricacies of patent laws.
Speak to our lawyers in Singapore for advice as you begin your foray into the tech sector.
For more information, please contact our Business Development Manager, Ricky Soetikno, at [email protected].