PORTUGAL: An Introduction to TMT

Chambers Practice Area Overview 2020 – TMT 

Introduction 

Portugal enters 2020 with the ambition to continue its growth and economic upturn. After years of financial crisis, the Portuguese economy continues to show consistent signs of strength that are fuelling confidence among companies and citizens. In 2019, the tourism sector in particular continued to thrive and it played a key role in fostering the growth of other industries, such as construction and services. The minimum wage was just recently increased. However, it is not all good news. The Portuguese banking system is still showing signs of fragility, public debt is still very high, the pace of economic growth is decreasing, while it is not clear whether the Portuguese economy will be sufficiently robust and adaptable to face any new international financial crisis.

M&A 

In 2019, the acquisition of Media Capital by Cofina did finally go forward and this transaction is expected to have a strong impact on the Portuguese media ecosystem. Altice, the multinational telecoms company, remained very active in the Portuguese market. Indeed, near the end of the year, Altice Europe sold Morgan Stanley Infrastructure Partners 49.99% of its fibre optic network in Portugal, in a deal that values the network at EUR 4.63 billion. Cellnex, in turn, has reached an agreement with Altice Europe and Belmont Infra Holding to acquire 100% of Portuguese telecommunications towers and sites operator OMTEL for an equivalent enterprise value of EUR 800 million. The acquisition involves the roll out of 400 sites in the next 4 years.

Start-ups 

Portugal continues to enjoy the spotlight at the centre of a veritable start-up “gold rush,” which is increasingly vibrant in the tech sector. The number of incubators and accelerators, as well as consultants and freelance contractors, continues to increase to cater to the exponential growth in start-up companies based in Portugal. Lisbon is the “capital” of the entrepreneurial ecosystem, although Porto and Braga are also important driving forces.

Data Protection 

A crucial legal topic in the TMT arena, however, continues to be privacy and personal data. As the General Data Protection Regulation (GDPR) has been in force since 25 May 2018, companies and public sector entities invested significant resources in 2019 in order to adapt their businesses and activities to the stringent new legal framework.

Training, gap analysis and general consulting to help companies prepare for the rules contained in the GDPR still took up a large part of TMT lawyers’ time in 2019 and this will certainly continue during 2020. The general level of maturity of organisations with regard to privacy continues to be low in Portugal. There is still an enormous amount of work to be done in order to ensure that the new rules will be complied with. At the same time, the legislative act adapting certain rules of the GDPR to the Portuguese legal system has been approved by the Portuguese Parliament.

Nevertheless, 2020 may reveal new concerns for companies and public sector organisations, considering the fact that the CNPD (the Portuguese data protection authority) has already started imposing fines for GDPR breaches.

AI 

Artificial intelligence, robotics and the associated legal issues these technologies raise, continue to be the subject of heated discussions at conferences and seminars. The number of technology companies announcing the use of AI seems to be growing exponentially. A few law firms are also getting into the game, with projects that deploy artificial intelligence and machine learning enabled technologies for use by the law firm and in the context of providing legal services. It will be interesting to see how this trend develops and, especially, whether it will lead to fundamental changes in law firms’ business models.

Blockchain 

While this technology is coming out of its infancy, an increasing number of companies are still trying to understand how their businesses may be impacted by distributed ledger technologies. The “second generation” of blockchain, based on Ethereum and smart contracts, has rapidly shifted attention from cryptocurrencies and ICOs to the underlying technology, unleashing enormous potential for value creation.

While the legal framework in Portugal is still to be adapted to this new decentralised economy, it is expected that several multijurisdictional projects created by companies established in Portugal will be launched in 2020. Without a doubt, this is a great challenge but also a great opportunity for TMT lawyers.

E-health 

The health sector is a particularly burgeoning area for TMT lawyers. With healthcare budgets under enormous pressure and an increasing desire for patients to be more in control of their own treatment, more and more medical treatments are being delivered electronically, with the use of devices and digital platforms. This covers a variety of methods from mobile apps providing direct medical support or connecting to other medical devices, to patient monitoring devices, personal guidance systems, online symptom checkers and medication reminders. The number of software applications classified as medical devices seems to increase each year. Data protection remains at the top of the list of concerns.

Digital Transformation 

In most companies, topics relating to digital transformation continue to be on the agenda, with projects of various sizes in the works, ensuring that the IT sector is busy as usual. Projects such as the acquisition of software, process automation, applications, blockchain integration, migrating data and applications to the cloud, and generally altering the way companies do business will continue to keep TMT lawyers busy and provide opportunities for growth for law firm practice areas.

Trade and business secrets 

The recent reform of the Portuguese Industrial Property Code has also implemented the EU Directive on Trade Secrets into Portuguese law. This is a highly significant step, as EU law has sought to harmonise the topic of trade and business secrets, in order to avoid the risks of loss of know-how, business innovation and unfair competition.

The protection of trade and business secrets responds to the need to secure tech innovation by creating a proper system of information within companies, thus protecting the commercial value of trade secrets against infringements by third parties.

By Pedro Lomba and Jorge Silva Martins