The Evolution of Commercial Law in the Digital Age: What Businesses Should Know
Whilst the digital age has introduced efficient mechanisms and innovative opportunities for businesses, it has also necessitated the expansion of traditional legal frameworks to address emerging issues relating to intellectual property, cyber security, data, privacy and mounting regulatory compliance requirements. Critically, as businesses continue to utilise digital advancements to alter the way they operate, they must also consider the added legal risks associated with these changes. This article seeks to address key legal considerations for businesses in the digital age and highlights how an experienced corporate and commercial lawyer can assist in this process.
The nature of corporate and commercial legal transactions has shifted in the digital age, prompted by the necessity for efficiency and accessibility. Digital tools such as contract management software, AI assisted technologies, remote meetings and electronic signing have all modernised the way commercial contractual transactions take place.
The Electronic Transactions Act 2000 (NSW) governs electronic transactions in NSW and provides a regulatory framework that facilitates the use of electronic transactions. This in turn has enabled businesses to efficiently engage in commercial interactions through online means.
When utilising these modernised methods, commercial lawyers will assist in ensuring digital compliance requirements relating to aspects of validity and capacity are achieved throughout the transaction.
The rate of digital change can make it difficult for businesses to remain up to date with the relevant regulatory compliance requirements. The result of failing to protect your business from the growing digital risks can be significant. It is important for businesses to carefully consider the following emerging issues in the digital age:
Protection of Intellectual Property
As data continues to grow in the digital realm, it is becoming increasingly important to ensure that your intellectual property (IP) is protected against potential infringement. IP rights are intangible and allow you to obtain exclusive rights to legally protect your ideas. These include patents, copyright, trademarks and registered designs. The complexities of the digital age necessitate businesses to engage with an experienced commercial and corporate lawyer to prepare a detailed IP strategy. Some ways to protect your IP include:
Onerous privacy obligations for businesses are becoming more relevant in the digital age whereby growing data breaches necessitate businesses to remain compliant. The Privacy Act 1988 (Privacy Act) regulates the collection, use, storage and disclosure of personal information. For example, if your business is captured under the Privacy Act you must notify individuals and OAIC of any data breaches likely to cause serious harm to the individual and have a valid Privacy Policy for collection of data in your organisation.
The Privacy Act has previously failed to address the growing concerns of the digital world. This has increasingly become more evident through recent large scale data breaches disclosing significant amounts of personal information. Recently, on 10 December 2024, the Privacy and Other Legislation Amendment Bill 2024 (Cth) received Royal Assent and amends provisions within the Privacy Act. The amendments form part of a long-standing wait to strengthen Australia’s privacy legislation and marks the beginning of further privacy reforms. Some of the amendments include further understanding on what constitutes an entities ‘reasonable steps to protect personal information’ to include ‘technical and organisational measures’ and greater transparency in relation to the use of automated decision making which comes into effect in December 2026.
Businesses must ensure they are aware of their obligations in the midst of expanding privacy law obligations.
It is also important that businesses have a data response plan in order to manage the risks for their business and clients and also to ensure that their team understand what is required to minimise and reduce the outcomes of data breaches.
In the digital age where privacy is a growing concern, this will ensure that risk is appropriately managed and businesses can avoid penalties for non-compliance and minimise outcomes of data breaches.
Online Fraud
The prevalence of online fraud will continue to strengthen as businesses utilise online mechanisms to transact. Coupled with the complexities of the online space and advanced fraud tactics, businesses must ensure they are both proactive and responsive in addressing these concerns. For example, from a legal perspective, as the digitilisation of commercial contracts continues to grow, it is important to ensure that legal capacity, identity and online access is appropriately addressed. This necessitates continued monitoring of your business and ensuring your staff are partaking in regular fraud-prevention training.
On 7 November 2024, the Scams Prevention Framework Bill 2024 was introduced into Parliament in order to implement a legislative framework to prevent and respond to scams. For regulated entities, there will be a requirement to take reasonable steps for the prevention, detection and disruption of scams. Such onerous obligations will ensure regulated entities are proactive in establishing preventative methods to avoid financial loss and maintain regulatory compliance.
The role of legal professionals in the digital age
Legal professionals are equipped with specialised knowledge which enables us to strategically advise businesses, both small and large, on the complexities of corporate and commercial law in the digital age. A careful analysis will enable lawyers to assess the vulnerabilities in business’s digital strategies and offer solutions with a practical benefit.
Corporate lawyers understand the obligations legislated in the Corporations Act 2001 and can assist businesses in structuring their organisations, understanding their responsibilities and providing contractual clarity. Proactive approaches are necessitated in the digital age in order to appropriately manage the growing risk concerns in tech-dominated industries.
As the complexities of the digital age can be overwhelming for businesses, we recommend businesses consider the following proactive strategies:
1. Stay-informed: the digital landscape is one which is ever-changing and demands keeping pace with changes to regulatory compliance considerations in order to avoid damage and penalties to your business.
2. Stay-protected: ensure that your intellectual property and your obligations in relation to the storage of personal information is protected. This involves creating strong security measures to mitigate risks of serious breaches.
3. Stay-updated: ensure your business remains current by keeping your privacy, data and associated policies up to date, provide all employees with regular training to mitigate the risk of unintentional disclosures and ensure that you frequently evaluate your business in the evolving landscape.
4. Stay – connected: connect with a lawyer in relation to navigating growing legal and regulatory frameworks through the early intervention of contracts, strategies and mitigation of risks.
Embracing the Digital Evolution
Whilst the digital age indicates no intention of slowing down, businesses need to remain alert to the emerging challenges to intellectual property, data, privacy and regulatory compliance. Digitalisation has not only shaped operational practices for businesses but also the way corporate and commercial transactions take place. It has become increasingly important for businesses to proactively and strategically plan for the future.
We encourage businesses to seek guidance from experienced commercial and corporate lawyers in order to confidentially navigate the complexities of the digital age.
If you have any questions or concerns contact our Corporate & Commercial Director Marissa Dimarco on 02 9264 9111