Yesterday, the European Commission, Council and Parliament announced that they had reached an agreement on the text of the Cyber Resilience Act (“CRA”). As a result, the CRA now looks set to finish its journey through the EU legislative process early next year. As we explained in our prior post about the Commission proposal (here), the CRA will introduce new cybersecurity obligations for a range of digital products sold in Europe. We’ll provide a more detailed summary of the agreed text once it is finalized and published but in this post we set out a brief summary of key provisions. In terms of timing, the CRA will come into force over a phased transition period starting in late 2025.

The CRA will impose a range of obligations for manufacturers and importers of “products with digital elements” (“PDEs”) – a category which is defined broadly to that include both hardware and software products. The final text has not yet been published, but based on the draft text circulated before the agreement and related reporting, the obligations are set to include:

  • Designing PDEs to meet certain essential cybersecurity requirements through risk assessment and protection against known vulnerabilities.
  • Submitting PDEs to conformity assessments.
  • Notifying identified vulnerabilities (within 24 hours) to the relevant national cybersecurity authority, the entity that maintains the vulnerable PDE and, potentially, ENISA.
  • Notifying severe security incidents to ENISA, the relevant national cybersecurity authority, and users of the PDE.
  • Conducting due diligence on imported PDEs.

Although the CRA applies broadly to PDEs, it is focused particularly on certain “Important” or “Critical” PDEs. The final list of PDEs in these categories has not yet published, but it is likely to include items covering both software (such as antivirus software and VPNs), and connected devices such as “smart home” devices, connected toys, and wearables. As with most recent European technology regulation, the CRA will come with the threat of high penalties for non-compliance – up to €15 million or 2.5% of global turnover.

Certain details of the CRA were hotly debated between the EU institutions, particularly the vulnerability reporting obligations as well as the categories of PDEs considered “Important” or “Critical”. The vulnerability reporting obligations have been of particular interest to industry, with security experts roundly criticizing the proposed vulnerability disclosure framework as being out of step with international standards and likely to lead to increased, rather than decreased, cybersecurity risks. Nonetheless, we understand that these provisions have been retained and indeed extended in the agreed text, with multiple phased vulnerability disclosures likely being required.   

What happens next?

The agreement between the EU institutions paves the way for the CRA to make its way onto the EU’s statute books following formal approval, which should occur in early 2024. After this, obligations under the law will come into force over a phased transition period, with the vulnerability reporting obligations kicking in after 21 months (that is, in late 2025) and the remaining obligations after 3 years (that is, in early 2027).

The CRA is just one of many cybersecurity regulations currently being prepared in Brussels: a consultation on Cybersecurity Act standards for ICT services just wrapped up; discussions on the draft Cybersecurity Certification Scheme for Cloud Services are ongoing (see our blog here); the consultation for “Tranche 2” of Digital Operational Resilience Act (“DORA”) technical standards is expected in the coming months; and Member States are continuing to work to implement NIS 2 by the October 2024 deadline. All of this sets up 2024 to be yet another busy year for cybersecurity regulation in Europe.

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Covington’s Privacy and Cybersecurity Practice regularly advises on cybersecurity laws in Europe and elsewhere. If you have any questions about how the raft of new European cyber regulations will affect your business, or about developments in the cybersecurity space more broadly, our team would be happy to discuss.

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Photo of Mark Young Mark Young

Mark Young is an experienced tech regulatory lawyer and a vice-chair of Covington’s Data Privacy and Cybersecurity Practice Group. He advises major global companies on their most challenging data privacy compliance matters and investigations. Mark also leads on EMEA cybersecurity matters at the…

Mark Young is an experienced tech regulatory lawyer and a vice-chair of Covington’s Data Privacy and Cybersecurity Practice Group. He advises major global companies on their most challenging data privacy compliance matters and investigations. Mark also leads on EMEA cybersecurity matters at the firm. In these contexts, he has worked closely with some of the world’s leading technology and life sciences companies and other multinationals.

Mark has been recognized for several years in Chambers UK as “a trusted adviser – practical, results-oriented and an expert in the field;” “fast, thorough and responsive;” “extremely pragmatic in advice on risk;” “provides thoughtful, strategic guidance and is a pleasure to work with;” and has “great insight into the regulators.” According to the most recent edition (2024), “He’s extremely technologically sophisticated and advises on true issues of first impression, particularly in the field of AI.”

Drawing on over 15 years of experience, Mark specializes in:

  • Advising on potential exposure under GDPR and international data privacy laws in relation to innovative products and services that involve cutting-edge technology, e.g., AI, biometric data, and connected devices.
  • Providing practical guidance on novel uses of personal data, responding to individuals exercising rights, and data transfers, including advising on Binding Corporate Rules (BCRs) and compliance challenges following Brexit and Schrems II.
  • Helping clients respond to investigations by data protection regulators in the UK, EU and globally, and advising on potential follow-on litigation risks.
  • Counseling ad networks (demand and supply side), retailers, and other adtech companies on data privacy compliance relating to programmatic advertising, and providing strategic advice on complaints and claims in a range of jurisdictions.
  • Advising life sciences companies on industry-specific data privacy issues, including:
    • clinical trials and pharmacovigilance;
    • digital health products and services; and
    • engagement with healthcare professionals and marketing programs.
  • International conflict of law issues relating to white collar investigations and data privacy compliance (collecting data from employees and others, international transfers, etc.).
  • Advising various clients on the EU NIS2 Directive and UK NIS regulations and other cybersecurity-related regulations, particularly (i) cloud computing service providers, online marketplaces, social media networks, and other digital infrastructure and service providers, and (ii) medical device and pharma companies, and other manufacturers.
  • Helping a broad range of organizations prepare for and respond to cybersecurity incidents, including personal data breaches, IP and trade secret theft, ransomware, insider threats, supply chain incidents, and state-sponsored attacks. Mark’s incident response expertise includes:
    • supervising technical investigations and providing updates to company boards and leaders;
    • advising on PR and related legal risks following an incident;
    • engaging with law enforcement and government agencies; and
    • advising on notification obligations and other legal risks, and representing clients before regulators around the world.
  • Advising clients on risks and potential liabilities in relation to corporate transactions, especially involving companies that process significant volumes of personal data (e.g., in the adtech, digital identity/anti-fraud, and social network sectors.)
  • Providing strategic advice and advocacy on a range of UK and EU technology law reform issues including data privacy, cybersecurity, ecommerce, eID and trust services, and software-related proposals.
  • Representing clients in connection with references to the Court of Justice of the EU.