By Mark Young and Oliver Grazebrook

The Irish Presidency of the Council of the EU has published a progress report on negotiations at Member State level on the EU CyberSecurity Strategy and proposed EU Directive on Network and Information Security (“NIS Directive”).  As we summarised in this post, if enacted in its current form, the NIS Directive will require companies in the energy, transport, financial services and health sectors, as well as a broad range of online companies, to implement mandatory security measures and report significant security incidents to national authorities.

Member States clearly have concerns with some fundamental aspects of the proposals.  The Presidency has highlighted the following issues:

Commission’s Impact Assessment (IA)

  • Several Member States have pointed out that the impact assessment does not sufficiently justify why specific sectors have been included in the proposal, such as “enablers of information society services”, and others have not, such as hardware/software manufacturers.
  • Most Member States have also raised the issue of the perceived significant costs involved in implementing the Directive and regretted that the IA fails to sufficiently assess the possible benefits. 
  • At a more fundamental level, Member States have requested further justification from the Commission why a legislative, rather than a voluntary approach, would be the preferred option to tackle the uneven level of security capabilities across the EU and the insufficient sharing of information on incidents, risks and threats. 

Scope

  • Member States have expressed doubts about subjecting providers of information society services to the same obligations as operators of critical infrastructures. 
  • More generally, many national delegations are unclear how the proposal for a NIS Directive would relate to other relevant pending and forthcoming legislation, such as that concerning critical infrastructures, attacks against information systems, data protection and electronic identification.  For example, they are also concerned that various notification obligations in several pieces of legislation might lead to confusion.

Organisational framework

  • Regarding establishing NIS strategies, cooperation plans and CERTs, delegations have not yet expressed firm positions as they are currently carrying out national consultations with stakeholders and are analysing the details of the proposal in the context of existing or planned national cyber strategies.

The next key event in the process will be a ministerial debate on 6 June.  The following questions have been tabled for debate:

  • Is legislation necessary in this field or would a voluntary or a mixed voluntary/legislative approach be preferable?
  • Should EU companies and companies from third countries active in the EU implement higher security standards than companies in and from other parts in the world?
  • Is there is a need to coordinate this matter further at a global level before regional solutions are implemented?
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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.