CZECH REPUBLIC: An Introduction to Czech Republic

Last year showed that companies still have gaps in accurately predicting future developments. They are struggling to cope with difficulty in finding workers, supply chains or the inflationary spiral. Nevertheless, we have witnessed that many technology companies are responsive and able react to the turbulent changes. Despite the economy in recession and slowing growth, multiple Czech technology companies became even stronger as they used the increased demand for information technology and services to their advantage.

Massive interest in e-commerce and the boom of online communication tools has resulted in an increased interest in a quality legal framework in the TMT area. A large portion of this development is also due to increased EU regulation, in particular when it comes to compliance, data and on-line platforms.

Cybersecurity and Data Protection 

The NIS 2 Directive and the new draft law on cybersecurity recently published by the National Cyber and Information Security Agency (NÚKIB) bring major changes to the field of cybersecurity. A number of updated obligations await the affected organisations and their statutory bodies as the Czech Act on cybersecurity (as currently proposed by the NÚKIB) has a slightly broader impact than the NIS2. Moreover, it imposes stricter obligations on a number of entities than required by NIS2.

We expect that personal data protection and cybersecurity will remain matters of primary concern and will lead to increased attention from all stakeholders.

Data Centres/Cloud Technology 

The possibility of providing services in the cloud (through cloud computing) instead of having to install them on their own hardware has become attractive even for public administration. The National Office for Cybersecurity and Information Security (NÚKIB) responded to these security risks by issuing several decrees on requirements for entry into the cloud computing catalogue and on security levels for the use of cloud computing by public authorities. Public authorities may only use cloud service providers that provide sufficient data protection against cyber-attacks and may only conclude new contracts for the provision of cloud services with providers listed in the catalogue maintained by the Czech Ministry of Interior.

Digitalization of State Administration and Online Justice

The newly elected government of the Czech Republic declares that digitalization of the public sector is one of its top priorities. The year 2023 is the year of establishment of the Digital and Information Agency (DIA) whose purpose is to set new standards, implement a unified methodology and streamline the project management of digitalization.

Recently, the Ministry has also made available a database of district and regional court decisions. This allows interested parties to read and review the anonymised reasons and decision of the lower instance courts, which further deepens the level of transparency of court decisions.

Telemedicine and E-health 

The healthcare industry is undergoing significant digital changes, and eHealth is one of the fastest growing sectors globally with numerous devices, systems and apps trying to work with medical data. New Czech Healthcare Electronicisation Act will also be a huge change for the local market as the main objective is to facilitate access to patient health records for patients, doctors and insurance companies in an unprecedented scope.

The field of telemedicine, ie, the provision of health services to patients without their physical presence – at a spatial distance or with a time distance – is also developing massively, as is the growing number of unique medical devices using virtual reality or artificial intelligence.

All of these areas present new legal challenges that will affect all those present in the field of healthcare services in the future.

AI Act and Product Liability Directive Ready for Digital Transformation

Autonomous systems, software using artificial intelligence and similar technologies give rise to various legal issues and policy discussions. The most discussed legal topics concern copyright protection of artificial intelligence outputs, liability for damages, and data quality.

Despite the non-existence of comprehensive AI regulation, proposals for individual regulations (Data Governance Act, AI Act and regulation on liability for artificial intelligence) are in the legislative process.

Digital Services 

Since 2023, the provision of digital service falls under a new contractual type – the digital content agreement. This introduces several newly adopted obligations concerning digital services provision, which especially in B2C segment set out requirements for compatibility, availability of service updates, and interoperability. Digital service providers conducting business in the Czech Republic shall also bear in mind an extensive consumer protection legislation.