Technology Sector Update - Q1 2025

Technology Sector Update Q1 2025

Technology Sector Update

Introduction

Welcome to the first issue of 2025 of our Technology Sector Update series. In this issue, we examine a selection of topics and trends impacting our clients during the course of the coming year.

First up, with regulatory scrutiny of adtech expected to increase in the coming year, Holly Pratt Kelly examines key developments, from ePrivacy and GDPR enforcement to fines and the latest advertising rules under the Digital Services Act. Some of our featured articles include:

• Investment Screening Act Now Live • Ireland’s New Participation Exemption • Key Legal Developments in AI – Parts 1 and 2 • Preparing for the European Accessibility Act • Employee Non-Solicitation Clauses: Competition Law Red Flag?

Should you wish to discuss these topics or any other issues impacting your organisation, please reach out to a member of our Technology Sector team.

Key Contacts Oisín Tobin Partner, Technology Sector Lead otobin@mhc.ie

Brian McElligott Partner, Head of Artificial Intelligence brianmcelligott@mhc.ie

Contact our Technology Sector team 2

Technology Sector Update

Screening of Third Country Transactions Act 2023 Key features of Ireland’s first investment screening regime Tara Kelly Partner, Head of Competition, Antitrust & Foreign Investment +353 86 145 5201 tarakelly@mhc.ie

The Screening of Third Country Transactions Act 2023 (the Screening Act) introduces the State’s first investment screening regime and implements Regulation (EU) 2019/452 (the EU Screening Regulation).

The Screening Act commenced on 6 January 2025 and enables the Minister for Enterprise, Trade and Employment to review certain transactions involving foreign investors for potential risks to the security or public order of the State. The Minister has published detailed ‘Inward Investment Screening Guidance’ (the Guidance), which helpfully clarifies several elements of the Screening Act.

Key features Key aspects of the new regime are: Mandatory and suspensory: The Screening Act introduces a mandatory and suspensory notification regime, similar to merger control. If a transaction meets the four criteria listed below, the parties must notify it to the Minister and obtain approval before completion. The only exception is for transactions that complete by 15 January 2025, which may be notified post-closing within 30 days of completion.

1. Investor from outside the Single Market: a “third-country undertaking”, ie from outside the EEA and Switzerland, or a person connected with such an undertaking, directly or indirectly:

• Acquires control of an asset or an undertaking in the State, or

• Changes the percentage of shares or voting rights in an undertaking in the State above 25% or 50%

The Guidance confirms that the Screening Act applies to direct and indirect investment from a third country. Therefore, a ‘third country’ investor using an EEA- or Swiss-incorporated acquisition vehicle is in scope.

The Screening Act also applies to EEA and Swiss investors if they are closely connected with a ‘third country’. This can include family relationships, acting as a trustee for beneficiaries from a third country, or being in partnership with a thirdcountry undertaking or national.

2. Value of transaction is at least €2 million: the cumulative ‘value of the transaction’ and other transactions between the parties is at least €2 million in a period of 12 months before the date of the transaction. The Guidance confirms that this threshold relates to the entire value of the transaction, ie the consideration being paid by the acquirer, including any international dimension.

3. Not an internal reorganisation: a transaction is not required to be notified if the same undertaking, directly or indirectly, controls all the parties to the transaction.

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Technology Sector Update

4. Transaction relates to, or impacts on, one or more critical sectors: The Guidance helpfully confirms that an Irish nexus requirement applies to the following critical sectors. This means that the target must operate the “critical” element of its business, or the critical infrastructure must be located, in Ireland.

• The freedom and pluralism of the media. This

• Critical infrastructure, whether physical or virtual,

Asset acquisitions: the object of the transaction may be an asset, provided there is a change in control of the asset. The Guidance provides that an asset does not need to be an asset constituting a business to which a turnover is attributable. For example, the sale, acquisition or licencing of IP rights could give rise to a notification requirement.

including energy, transport, water, health, communications, media, data processing or storage, aerospace, defence, electoral or financial infrastructure, and sensitive facilities, as well as land and real estate crucial for the use of that critical infrastructure. The Guidance clarifies that a notification will only be required where the infrastructure in question comes within one of the categories listed in Annex 1 of EU Directive 2022/2557 (the CER Directive) and an incident would have “significant disruptive effects”, which must be determined on a case-by-case basis by reference to a prescribed list of factors.

• Critical technologies and dual use items, including

artificial intelligence, robotics, semiconductors, cybersecurity, aerospace, defence, energy storage, quantum and nuclear technologies as well as nanotechnologies and biotechnologies.

The Guidance clarifies that a technology is critical, and within scope, if it is listed as either a dual-use item in Annex 1 of the EU’s Dual Use Regulation (Council Regulation 2021/821), or as military technology or equipment in the EU’s Common Military List (Council Common Position 2008/944/CFSP).

• Supply of critical inputs, including energy or

raw materials, critical medicines, as well as food security. Access to sensitive information, including personal data, or the ability to control such information. The Guidance states that sensitive information is data that must be protected from unauthorised access and may be business, government or personal data interpreted in accordance with the definition of Special Category Data under the GDPR.

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category includes media businesses operating, selling or otherwise active in the State. The Guidance clarifies that the level of activity of the media business in the State, based on sales, subscribers, viewers or other relevant metrics, must be substantive to trigger mandatory notification.

Target or part of the target must be ‘in the State’: an asset is deemed to be ‘in the State’ when it is physically located in the State or, in the case of an intangible asset, owned, controlled or otherwise in the possession of an undertaking in the State. An undertaking is ‘in the State’ when it is constituted or otherwise governed by the laws of the State or has its principal place of business in the State.

Multi-party obligation to notify: the notification obligation rests on all parties to a transaction meeting the relevant criteria, unless they are not aware of the transaction. Joint notifications are possible and are expected to be the norm.

“Call in” powers: the Minister may “call in” for review notifiable transactions that are not notified, referred to as ‘non notified transactions’. Similarly, transactions that are not notifiable may be called in for review, where the Minister has reasonable grounds for believing the transaction affects, or would be likely to affect, the security or public order of the State. The Guidance clarifies that this power is aimed at new or emerging technologies or sectors that are not captured by the mandatory notification criteria set out in the Screening Act. The Minister must exercise the ‘call in’ power within 15 months of the transaction being completed in the case of transactions that are not notifiable. In the case of non-notified transactions, the applicable time limit is the later of 5 years from completion or 6 months from the Minister becoming aware of the transaction.

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Retrospective application: the Minister can ‘call in’ for review any transaction that completed not more than 15 months before the commencement of the Screening Act, ie after 1 October 2023.

No voluntary regime: the Screening Act does not provide for voluntary notifications.

Offence of gun-jumping: it is a criminal offence to complete, or take steps to complete, a nonnotified transaction or a notified transaction under review by the Minister prior to the Minister issuing a screening decision clearing the proposed transaction or making it subject to conditions.

Where the transaction is subject to a conditional screening decision, it is an offence to complete the transaction other than in accordance with those conditions.

Information requests: the Minister may request further information. Failure to comply with a ‘notice of information’ or the provision of false information in response is a criminal offence.

Lengthy review timeline: the Minister is required to make a screening decision within 90 days from the date on which the Minister issues a screening notice regarding the transaction. The 90-day review period may be extended to 135 days at the discretion of the Minister. The review period is suspended by the issuance of a notice of information and resumes on the date that the notice is deemed to be complied with. The Guidance confirms that the Department considers 90 days to be the outer bound of the statutory review period, not the target, and in practice many transactions will be cleared quicker.

Wide-ranging powers to impose remedies: the Minister may prohibit the transaction, or parts of it, or impose conditions. Conditions can include divestment requirements, behavioural requirements, ring-fencing requirements, and compliance reporting obligations.

Depending on the facts, both the undertaking and any director, manager, secretary or other officer of the undertaking, or a person purporting to act in that capacity, may be guilty of an offence and held liable.

Appeals: parties to a transaction may appeal a screening decision to an independent adjudicator and must notify the Minister that they are appealing no later than 30 days after being notified of the screening decision. The appellant must submit the appeal to the adjudicator within 14 days after providing notice to the Minister. A decision of an adjudicator may be appealed on a point of law to the High Court.

Conclusion The Screening Act is one of the most significant developments in Irish M&A in recent years. It has the potential to cast a wide net. Investors should be thinking now about key questions such as:

• Does the transaction meet the criteria for a mandatory notification?

• Are investment screening warranties required?

• Should provision be made in the deal documentation for a potential notification?

• What is the potential impact of a notification on the deal timeline?

• What remedies could be required by the Minister to address any public order and/or security concerns?

• If the transaction is not mandatorily notifiable

or has closed since 1 October 2023, is it at risk of being called-in for review by the Minister?

Early engagement on these and other questions is advisable. Please get in touch with a member of our Competition, Antitrust & Foreign Investment team for more information.

Criminal sanctions: persons found guilty of an offence under the Screening Act may be liable, on summary conviction, to a fine not exceeding €5,000 and/or up to 6 months imprisonment or, on conviction on indictment, to a fine not exceeding €4 million and/or up to 5 years imprisonment.

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Technology Sector Update

Ireland’s New Participation Exemption The final piece of the jigsaw in Ireland’s holding company regime Kevin Mangan Partner, Co-Head of Tax +353 86 167 2150 kmangan@mhc.ie

Niamh Caffrey Partner, Co-Head of Tax +353 86 032 4193 ncaffrey@mhc.ie

Ireland’s attractive tax regime and its transparent and predictable tax system have been key drivers for some of the world’s leading public and private multinational groups establishing holding companies in Ireland. The introduction of a participation exemption for foreign dividends from 1 January 2025 will further improve Ireland’s competitiveness on the global stage. It is broadly anticipated that it will enhance Ireland’s reputation as an attractive place in which to invest and do business.

Under that existing regime distributions received are subject to corporation tax in Ireland. However, a credit is given for tax paid overseas with the effect that generally no further tax is payable in Ireland.

The existing regime is complex in terms of tracing through foreign credits, so the new exemption method is expected to simplify the tax compliance obligations for holding companies or companies with established headquarters in Ireland.

Application of the exemption

Key conditions of the exemption are set out in the following table. Readers should be aware that there are additional aspects not detailed here that need to be considered.

The participation exemption will exempt qualifying distributions1 made on or after 1 January 2025 from corporation tax in the hands of the recipient.

Companies can opt into the exemption on an annual basis. This exemption will apply to all in-scope foreign distributions received by that company during the accounting period for which the election is made.

Existing regime The existing tax credit system for foreign distributions will continue to apply for any accounting period for which a company does not opt into the exemption. It will also continue to apply for foreign distributions that do not qualify for the exemption.

1. References to distributions in this article include dividends.

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Key conditions

Tax residence and status of the payer

in an EEA state, ie EU • Resident member states together with Iceland, Liechtenstein and Norway, or a country with which Ireland has a double tax treaty, referred to as a ‘Relevant Territory’, and must not be generally exempt from foreign tax resident in a jurisdiction that • Not is included on the EU list of noncooperative jurisdictions, known as the EU Blacklist tests must be met on the • These date the distribution is made and throughout the 5-year period prior to that date or, where shorter, the period from incorporation of the payer

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Ownership of the payer by the Irish holding company

ownership requirement, by • 5% reference to ordinary share capital, profits available for distribution and assets on a winding up indirect shareholding via an • An intermediary company resident in a Relevant Territory may be taken into account holding requirement must be • The satisfied for an uninterrupted period of at least 12 months that includes the date of the distribution

Qualifying distribution

in respect of share capital, • Made which can include preference share

Anti-avoidance rules The exemption will not apply to distributions from a company where certain transactions took place in the five years before the distribution. These include merging with a company, or acquiring a business from a company, that was not resident in a Relevant Territory.

In addition, a specific anti-avoidance provision disapplies the exemption where arrangements are put in place, one of the main purposes of which is obtaining a tax advantage and those arrangements are not considered genuine.

capital

• Income in the hands of the recipient • Must not be: – Deductible for tax purposes in any other jurisdiction or be interest or interest equivalent or other income from a debt claim providing rights to participate in a company’s profits – A distribution on a winding up, however, such a distribution may fall under Ireland’s participation exemption for capital gains Source of distribution

“out of profits” or “out of the • Made assets” (for example out of a capital reserve) of the payer company the distribution is paid out • Where of assets of the payer, additional tests must be met including that a sale of the shares of the payer company at that time would qualify for the existing Irish capital gains tax participation exemption

Other features of Ireland’s holding company offering In addition to this new exemption, the following features of the Irish tax regime make Ireland an attractive location for a holding company, subject to satisfying the qualifying criteria:

• Exemption from capital gains on disposals of shareholdings of 5% or more in companies

• Exemptions from withholding tax on interest and dividends payable by Irish companies

• 12.5% rate of corporation tax for trading

activities, with 25% rate for passive activities

• Expenses of managing a holding company are generally deductible for tax purposes in Ireland

• Interest deductibility on debt-financed share acquisitions

• Ireland has an extensive double tax treaty network currently with 74 countries which include all the major trading nations

• Ireland has implemented applicable EU tax

directives and OECD policies on tax matters

• Ireland’s transfer pricing rules follow the OECD Guidelines

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Technology Sector Update

Conclusion In our view, the introduction of this exemption is the final piece of the jigsaw in ensuring that Ireland’s holding company regime remains competitive and continues to attract global businesses.

While there are detailed qualifying conditions and anti-avoidance provisions which should be considered in advance of any distribution to an Irish holding company, it is not expected that these should affect most standard dividend payments from companies resident in the EEA or countries with which Ireland has a double tax agreement.

Existing Irish holding companies should review their corporate structure to ensure that distributions from group companies will qualify for the exemption and groups considering the establishment of a holding company in Ireland should factor the exemption into their considerations.

For more information and expert advice on all relevant taxation matters impacting your business, contact a member of our Tax team.

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Technology Sector Update

2024 in Review: Key Legal Developments in AI Brian McElligott Partner, Head of Artificial Intelligence +353 86 150 4771 brianmcelligott@mhc.ie

2024 has been a pivotal year for AI regulation, with significant legal and policy advancements setting the stage for how AI will be governed globally. From the EU’s landmark AI Act to the first international AI treaty, regulators are tackling the complex challenges of transparency, accountability, and cross-border consistency. Public consultations and updated standards reflect growing efforts to refine governance frameworks and balance innovation with responsible oversight.

1. The EU publishes the AI Act The EU’s long-anticipated AI Act1 was finally adopted in 2024. The legislation marks a significant milestone in the global regulation of AI. The AI Act entered into force on 1 August 2024. It tackles issues of safety, transparency and accountability aiming to balance innovation with trustworthy and safe AI. The legislation adopts a risk-based approach, classifying AI systems into risk categories based on their potential use and impact on individuals and society. The first obligations concerning prohibited AI will apply from 2 February 2025.

Leona Chow Associate, Privacy & Data Security +353 86 2017605 lchow@MHC.ie

2. The AI Office is established Early 2024 marked the unveiling of the AI Office by the Commission. The AI Office will play a key role in the implementation of the AI Act including the regulation of general-purpose AI models. The AI Office will comprise five units, employ more than 140 staff and be led by the Head of the AI Office, Lucilla Sioli.

3. The Council of Europe’s Framework Convention on artificial intelligence and human rights, democracy and the rule of law May 2024 also saw the Council of Europe adopt the world’s first international treaty on AI, which outlines shared principles for ethical AI and establishes commitments for signatories. The Framework Convention aims to harmonise AI standards across national boundaries by adopting a risk-based approach and addressing issues like transparency and human oversight. The Framework Convention’s adoption emphasises a growing global consensus around responsible AI governance.

1. Regulation (EU) 2024/168

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Technology Sector Update

It also sets the stage for international cooperation in AI regulation. Initial signatories include:

• The EU • United States • United Kingdom • Andora • Georgia • Iceland • Israel • The Republic of Moldova • Norway, and • San Marino

4. AI consultations take place A series of public consultations on AI-related policies and frameworks took place throughout the year, reflecting broad stakeholder engagement and the dynamic regulatory environment. The most notable consultation this year related to the Commission’s consultation on prohibited AI systems and the definition of AI systems, as well as the consultation on the Codes of Practice. In addition to this consultation, in May the Department of Enterprise, Trade and Employment in Ireland launched a public consultation on the national implementation of the AI Act in Ireland. In November, a refresh of Ireland’s National AI Strategy was announced. Data protection authorities have also launched multistakeholder events including:

• The EDPB’s stakeholder event on AI models • The ICO’s consultation series on generative AI and data protection, and

•

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The CNIL’s consultation on AI systems

5. Key guidelines and standards for responsible AI Several multilateral organisations and national bodies have published guidance and updates on AI best practices in recent months. In May, the Organisation for Economic Co-operation and Development (OECD) revised its AI Principles in response to the emergence of new AI technologies including general-purpose AI and generative AI. At a national level, the Irish Data Protection Commissioner published guidelines on Large Language Models (LLMs) and data protection. In the UK, the British Standards Institution (BSI) issued Global Guidance for Responsible AI Management, and ISO/IEC released updates to their AI standards, strengthening the global regulatory landscape for AI. Harmonised standards are being developed by European standardisation organisations however these have been delayed and are not expected until the end of 2025.

Conclusion While 2024 marked significant progress in AI regulation, key issues remain unresolved. These include:

• The designation of AI Act regulators • The approach to protection of copyright holder rights

• Navigating privacy rights in AI model development, and

• Clarifying AI liability In the next part of this two-part series, we will look at the issues that remained unresolved in 2024.

For more information on the implications of integrating AI systems into your business, please contact a member of our Artificial Intelligence team.

Technology Sector Update

2024 in Review: Key Legal Developments in AI – Part 2 Brian McElligott Partner, Head of Artificial Intelligence +353 86 150 4771 brianmcelligott@mhc.ie

In the first part of our two-part series, we explored the key legal developments in AI in 2024.

Despite these developments, several significant issues remain, highlighting the challenges and complexities of regulating AI. We discuss five of these key issues below.

1. Enforcement under the AI Act The AI Act allows for either a centralised or decentralised model in appointing regulators.

However, it remains uncertain which model will be adopted by Member States. Additionally, the identity of the relevant regulators for many of the Annex III high-risk AI use cases remains unclear.

Many stakeholders, including Italy’s data authority and Germany’s Datenschutzkonferenz, argue that data protection authorities (DPAs) are well-suited for the role, given their expertise in privacy and enforcement. Others propose that AI’s broader impacts might be better managed by new or cross-disciplinary agencies. Belgium’s Secretary of State for Digitalisation, for instance, suggests a single digital regulator to oversee EU-wide digital regulations. The choice of regulatory body will be crucial for consistent enforcement, compliance, and effective oversight.

Leona Chow Associate, Privacy & Data Security +353 86 2017605 lchow@MHC.ie

2. Copyright The tension between the development of AI, particularly large language models (LLMs), and copyright law continues to spark significant debate.

This year saw the initiation of more high-profile litigation in both the EU and the United States to address issues related to copyright and model training. In particular, courts are being asked to address the question of whether AI training qualifies as fair use under copyright law. The European courts, in July, examined the legality of using copyrighted works, i.e. a download of an image by a photographer, for the purpose of training an AI model. The court dismissed the copyright infringement claim in October. It noted the use of the image fell within an exception for text and data mining. It remains to be seen how questions surrounding ownership, licensing, and fair use of AI-generated works will be resolved. Of particular interest will be how the copyright transparency provisions under the AI Act will be enforced against providers of general-purpose AI models.

3. Data protection Beyond copyright concerns, data protection issues are also central to AI training. Much of the data used in training contains personal data, pushing companies to address how to safeguard privacy rights and ensure transparency.

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Technology Sector Update

This year, these challenges came to the forefront.

Several providers paused AI training on EU user data, while others opted not to launch certain AI products in the EU. In some instances, data protection authorities have launched investigations over privacy concerns. DPAs conclude that companies must focus on establishing a legal basis for using personal data in AI training. This is essential to ensure compliance with GDPR principles, including fairness, transparency, and data minimisation.

4. Liability The Artificial Intelligence Liability Directive (AILD) was a significant focus in 2024. It aims to clarify liability issues associated with AI products. The AILD was finally published in November. However, the AILD’s progress through the legislative procedure has been delayed and its future is uncertain. Both the EU Parliament and Council are sceptical as to whether the AILD is required, particularly given that the Product Liability Directive (PLD) now covers software. The EU Parliament called for a further impact assessment of the AILD. The assessment recommends a revised Product Liability Regulation and AI Liability Regulation, to be reframed as a software liability regulation, instead of the PLD and AILD. Since the publication of the assessment the PLD has entered into force, and it is unclear what approach the EU will take regarding the AILD.

5. AI codes of practice The AI Act introduces critical requirements for transparency and accountability in the use of AI models. However, questions remain about how these principles will be practically enforced. This is especially true regarding:

• Model monitoring • Auditing, and • The appropriate level of transparency Central to this is determining the scope of information that model providers must disclose, both to regulators and the public.

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The forthcoming General Purpose AI Codes of Practice, being developed by the AI Office in collaboration with stakeholders, aim to address these standards. The drafting process reached its first important milestone with the publication of the first draft of the General Purpose AI Code of Practice on 14 November. A second draft was published on 19 December. The drafting process will continue until early next year with the finalised text expected by April 2025.

Conclusion 2024 has been a landmark year for AI law, with regulatory frameworks and international cooperation advancing responsible AI development.

While progress has been substantial, challenges around enforcement, data protection, copyright, and liability persist. In the coming year, pivotal milestones in AI regulation are set to further reshape the compliance landscape. New obligations on prohibited AI practices will take effect, with guidelines to clarify enforcement, and the anticipated Codes of Practice will establish standards for transparency, accountability, and ethics in AI use. The appointment of Member State Market Surveillance Authorities will strengthen regulatory oversight across the EU. This will be supported by new guidance on handling serious AI incidents. Additionally, the publication of AI standards will help ensure safe and consistent practices. The Product Liability Directive will redefine AI liability, impacting providers and consumers alike. In addition, data protection and copyright guidelines are expected to bring further clarity.

Together, these developments mean 2025 will be another defining year for shaping the regulation of AI in Europe and globally.

For more information on the implications of integrating AI systems into your business, please contact a member of our Artificial Intelligence team.

Technology Sector Update

Preparing for the European Accessibility Act

Dermot McGirr Partner, Commercial +353 86 103 6756 dmcgirr@mhc.ie

An article authored by Commercial partner, Dermot McGirr entitled ‘Preparing for the European Accessibility Act: A Guide for Irish Businesses’ appeared in the December issue of Business Plus.

The European Accessibility Act (EAA) introduces new compliance obligations for businesses, aiming to enhance accessibility across a range of products and services. With less than six months left before the EAA applies in Ireland, businesses need to assess its effect on their business, including preparing for the compliance steps that they will have to take in advance of June 2025.

Preparing for the European Accessibility Act: A Guide for Irish Businesses The European Accessibility Act (EAA), which was implemented into Irish law under the European Union (Accessibility Requirements of Products and Services) Regulations 2023, comes into effect on 28 June 2025.

These Regulations introduce accessibility requirements for certain products and services in the private sector, to enhance the ability of people with disabilities to use everyday products and services.

In-scope businesses need to use the lead-in time to identify whether any of their products or services are within the scope of the Regulations and what they need to do to comply with the accessibility requirements under the EAA.

What Does the EAA Cover?

The EAA is not a general accessibility law and only applies to certain specified products and services.

Products covered by the EAA include:

• Computers, laptops, and operating systems • ATMs, ticketing machines, and check-in kiosks • Smartphones, and other telecommunications devices

• E-readers Services covered include: • E-commerce • Consumer banking • E-books and reading software • Access to audiovisual media services • Electronic communications services • Certain aspects of passenger transport services (air, bus, rail, and waterborne)

Key sectors such as e-commerce, banking, telecommunications, and transport are likely to feel the most impact.

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Technology Sector Update

Key Requirements

Preparing for Compliance

The EAA outlines general accessibility standards for all products and services within its scope with additional requirements for specific products and services.

Preparing for the EAA involves assessing current practices and implementing changes to meet the new standards. Here are the steps businesses should take:

For products, businesses must:

• Assess scope: Identify whether your products or

• Design products to maximise usability for individuals with disabilities

• Provide accessible instructions for use and maintenance

• Ensure packaging and support services are accessible

For services, requirements include:

• Ensuring websites and mobile apps are accessible

• Providing information on service features in accessible formats

• Offering customer support systems that cater to people with disabilities

• Understand your role: Determine the role you

play in the supply chain of the specific product or services. The requirements that the EAA imposes on business differ, depending on whether a business is a manufacturer, distributor, importer, authorised representative, or service provider.

• Consider exemptions and transitional

measures: In line with the EU law principle of proportionality, there are exemptions from some or all of the requirements of the EAA in addition to transitional measures which permit a grace period following the coming into force of the EAA.

These standards aim to improve usability and foster inclusivity across the EU.

Given the significant impact the EAA can have on businesses, it may be important to consider whether any of these can be relied upon to ease the transition to more accessible products or services.

Accessibility Statements

• Analyse requirements: Familiarise yourself with

Businesses offering in-scope services must publish information about the accessibility of their services in their terms and conditions or equivalent document, which is often done through an accessibility statement. This document should:

the accessibility requirements that apply to your products or services.

• Conduct a Gap Assessment: Identify gaps in your current offerings and plan the changes needed to meet EAA standards.

• Outline how the business complies with the EAA’s

• Develop an Accessibility Statement if

• Be included in general terms and conditions or

• Train your design teams • Monitor and update: Regularly review your

requirements

similar materials

• Be available in accessible formats, such as written and oral versions

Accessibility statements are a key compliance tool and demonstrate a business’s commitment to inclusivity.

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services fall under the EAA’s remit.

providing in-scope services

products, services, and processes to ensure ongoing compliance.

Technology Sector Update

Conclusion The European Accessibility Act will have significant consequences for Irish businesses subject to its requirements. Given that there is now only six months before the European Accessibility Act takes effect in Ireland and that any changes required to product and services might be significant, now is an opportune time to progress your products and services towards compliance.

Dermot McGirr is a Commercial partner at Mason Hayes & Curran. For more information and expert advice on the EAA, visit MHC.ie/EAA

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Technology Sector Update

Employee Non-Solicitation Clauses: Competition Law Red Flag?

Tara Kelly Partner, Head of Competition, Antitrust & Foreign Investment +353 86 145 5201 tarakelly@mhc.ie

The European Commission has communicated a clear intention to take a strict approach towards all forms of ‘no-poach’ agreements. It views these agreements as a form of market sharing, which is a serious infringement of the competition laws.

The Commission considers that, insofar as the competition laws are concerned, there is no meaningful distinction between an agreement not to actively or passively hire employees and an agreement not to proactively solicit employees.

Both are potential restrictions of competition by object. This means that agreements not to hire or solicit another company’s employees are considered to be inherently harmful to competition.

As a result, it is not necessary for the European Commission to examine their effects to find an infringement of EU competition law.

The European Commission has not yet issued an infringement decision concerning a no-poach arrangement. Last year, the European Commission announced it had opened a formal investigation in the food delivery sector, prompted by concerns about possible no-poach agreements among other matters. The announcement followed dawn raids carried out at the premises of Delivery Hero and Glovo in 2022 and 2023. Additionally, in November 2024, the European Commission announced that it had carried out dawn raids in the data centre construction industry. The purpose was to investigate “possible collusion in the form of nopoach agreements”.

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In Ireland, the Chair of the Competition and Consumer Protection Commission (CCPC) has confirmed that the CCPC would be keen to investigate wage-fixing or no-poach agreements if evidence of these arrangements emerged.

What does this mean for non-solicitation clauses in the context of a legitimate commercial agreement, such as a distribution agreement or a joint venture?

No-poach agreements may qualify as “ancillary” to a legitimate arrangement, and therefore fall outside the competition laws. However, this arises only under strict conditions. For a no-poach agreement to qualify as an ancillary restraint, four cumulative conditions must be met: 1. There is a main non-restrictive transaction 2. The no-poach restriction is directly related to that transaction 3. The no-poach restriction is objectively necessary and 4. The no-poach restriction is proportionate to the main objective of the transaction, ie there are no less restrictive means to allow the transaction to occur.

The European Commission has set a high bar for satisfying these conditions.

For example, a non-solicitation clause will only be considered “objectively necessary” if similarly situated parties would refuse to participate in the transaction without the restriction. This is the case when the main objective of the transaction would be “impossible” to achieve without it.

Technology Sector Update

Therefore, at a minimum, it is important to ensure that the clause is scoped narrowly, including by covering only those employees necessary to the relevant relationship. Additionally, the company should be satisfied that there is no alternative, less restrictive means of achieving the same result as the non-solicitation clause, eg by entering an NDA. Given the seriousness with which competition authorities throughout Europe are approaching agreements impacting labour markets, in-house counsel should:

• Proactively review existing commercial

arrangements containing non-solicitation clauses to ensure they do not raise any competition law concerns

• Conduct a thorough competition law analysis of any new non-solicitation agreement before it is entered into

• Ensure HR personnel receive tailored competition law training, and

• Obtain specialist competition law advice before anyone in the company communicates with competitors about wages or hiring decisions or strategies

Please get in touch with a member of our Competition, Antitrust & Foreign Investment team for more information.

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Technology Sector Update

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We are a business law firm with 120 partners and offices in Dublin, London, New York and San Francisco.

From first round funding and global privacy structures, to strategic outsourcing partnerships and intellectual property management, we give smart advice. We regularly advise on topics at the intersection of law and new technology such as AI and Fintech, frequently when there is no definitive regulatory guidance. Clients trust us to steer them through new and sometimes unforeseen legal situations.

Central to our work in the technology sector is our market leading advice on data privacy and protection. We work closely with organisations to help them balance the often conflicting needs of monetisation and data protection. Our lawyers have also worked on some of the most high profile data breaches both locally and internationally, with a keen eye on the legal, commercial and reputational issues that arise.

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Our legal services are grounded in deep expertise and informed by practical experience. We tailor our advice to our clients’ business and strategic objectives, giving them clear recommendations.

This allows clients to make good, informed decisions and to anticipate and successfully navigate even the most complex matters.

Our working style is versatile and collaborative, creating a shared perspective with clients so that legal solutions are developed together.

Our service is award-winning and innovative.

This approach is how we make a valuable and practical contribution to each client’s objectives.

What others say about us Our Technology Team “Unrivalled legal and industry knowledge.

They are the go-to firm for anything information technology related.”

MHC.ie/Technology

Legal 500, 2024

Our Technology Team “At the cutting edge of the post-GDPR data privacy/protection world. They advise many of the world’s biggest companies on GDPR compliance and in ground-breaking regulatory inquiries.”

Legal 500, 2024

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The contents of this publication are to assist access to information and do not constitute legal or other advice. Readers should obtain their own legal and other advice as may be required. © Copyright 2025 Mason Hayes & Curran LLP. February 2025.