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By Stephen Gardner
Jan. 14 — Web services that are established in European Union member states, including Amazon.com Inc. and Google Inc., would be required to submit their cybersecurity procedures to the oversight of EU national authorities under a proposed directive approved by the European Parliament's Internal Market Committee Jan. 14.
The directive, formally known as the Network and Information Security (NIS) Directive, would require EU countries to identify critical service providers that could fall victim to cyberattacks, and to then validate the companies' cybersecurity measures.
The directive would also create a reporting obligation, under which critical service providers would be obliged to notify the authorities of serious cyberattacks on their networks. The directive would cover attacks on systems, rather than data breaches.
Jorg Hladjk, counsel with Hunton & Williams LLP in Brussels, told Bloomberg BNA Jan. 14 that the directive, once finally ratified and implemented by EU countries, might be “very burdensome for business.”
The directive would cover online marketplaces, search engines and cloud computing services, but would exclude from its scope social networks, such as Facebook Inc.
The directive would also apply to companies in seven sectors considered essential to the security of EU countries: energy, transportation, banking, financial markets, health, water utilities and digital infrastructure, which covers Internet exchange points and Internet domain name services.
The directive, which was proposed by the European Commission, the EU's executive arm, in 2013, was provisionally agreed in December 2015 by representatives from the European Parliament and the Council of the EU (14 PVLR 2272, 12/14/15).
To be finalized, the directive must be approved by the European Parliament, and must be formally adopted by EU member states in the council. No dates have been set for final ratification.
EU member states would then have 21 months to implement the provisions of the directive into their national legal codes, and an additional six months to identify “critical” companies and services that would be subject to the oversight and notification requirements.
According to the text of the directive, member state authorities should apply the requirements to companies and services if a cyberattack on their systems could entail “significant disruptive effects” on an economy-wide level. Smaller companies would be excluded from the scope of the directive.
National adoption by each EU member state of their own provisions transposing the directive's minimum standards could “lead to a patchwork of local requirements,” Hladjk said.
Until each country has drawn up its list of critical companies that will be covered by the directive, “legal uncertainty” would persist, Hladjk said.
“The list of security breach reporting requirements gets longer and longer and companies need a strategic plan to comply with this new regime,” he added.
German European Parliament member and leading privacy lawmaker Jan Philipp Albrecht said in a statement Jan. 14 that once it is ratified, EU countries should rapidly adopt the directive “so that vulnerabilities can be quickly eliminated.” Countries also “must share better” information about network security, Albrecht said.
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