Accelerated digitisation of the economy, dematerialisation, digital identity, protection of personal data, emergence of new trade and payment instruments, etc.: the legal challenges in terms of digital innovation are numerous, particularly in terms of communication, transactions and customer journeys.

Even if the time has come to strengthen the framework and regulate the use of new technologies, the many European texts that have recently come into force (e.g., regulations on data governance and digital services, or "DGA^[1]" and "DSA^[2]", and the proposed regulation on artificial intelligence, or “AI Act” ) or that are currently being negotiated will not suffice to provide immediate optimal legal protection for the growth of new practices and innovative services deployed by companies and institutions engaged in their digital transformation.

Therefore, it appears that the organisations that have chosen to embark full-on into a new era of digitisation –both in terms of service provision and sales, and in terms of new technologies– have placed the customers’ trust in these new habits (whether BtoB or BtoC) at the heart of their strategies.

In this respect, the legal protection provided by contracts, general terms and conditions of use or sale, and operational measures imposed by regulations (confidentiality policies, KYC/KYT, etc.), is fundamental from the very outset of innovation initiatives. This means that the deployment of activities based on new technologies benefits from a legal structure that rests on existing tools, already relatively well-mastered by many companies. That said, the issue of digital trust also gives rise to a new strategic “tug of war” between stakeholders (particularly concerning value sharing and the allocation of responsibilities), consequently fuelling a substantial number of litigation matters before or during the implementation of the numerous legislative and regulatory initiatives underway.

While certain legal issues relating to digital trust are similar from one sector to another, a great deal more still lie ahead and these challenges need to be addressed in light of the specificities of each industry. 

For example, in the banking and finance sector, in view of the new challenges linked to service providers and technological solutions to which the players are exposed, the digitisation of service offerings and the development of digital finance and decentralised finance call for a differentiated and innovative legal treatment. The coordinated linkage between an already large number of regulatory obligations in the sector (stemming in particular from MIFID, MAR, EMIR, CSDR, PSD2, EMD2, PRIIPS, etc.) and the legal structuring of vendor contracts and services agreements has now become key, particularly in a context of increased outsourcing and partnerships.

Also, over the past three years, considerable progress has been made on strengthening the European Financial Regulation in areas linked to digitisation and the digital economy. Directives and regulations recently passed at European level on cybersecurity, data protection, and concerning new markets such as markets in crypto-assets (e.g., DORA^[3], NISD2^[4], FIDAR^[5], MICAR^[6]) should compel companies to equip themselves with adapted solutions in terms of IT security and digital resilience and to adopt the right method so as to enhance their legal protection. 

In the field of digital finance (distributed ledger technology applications in the finance sector, such as blockchain), numerous other legal issues also need to be addressed, particularly in relation to decentralisation, transparency and inviolability. Legal innovation will therefore prove of paramount importance to build confidence and complement and further refine the initial regulatory measures (e.g., the “Pilot Regime” Regulation for blockchain-based financial securities, also known as “security tokens”) taken by the European Commission (e.g., in the field of decentralised finance, or "Defi", which is currently unregulated).

In the luxury sector, companies and groups face different types of challenges, where the deployment of new digital services (customer loyalty, customer service, VIP, insurance, certification, gamification, etc.), the growing diversification of remote payment methods, and enhanced branding in the digital world are increasing the risks to which customers are exposed. Technological breaches (identity theft, counterfeits, payments) –for example linked to the use of certain digital platforms– underscore the need for these players to build trust in the digital customer experience and make it known. Also, brands are exploring the next frontier, that of “Web3” technology (e.g., metaverse, NFTs), through testing projects. This comes with intensified legal issues that will have to be anticipated and dealt with in order to enable the emergence of large-scale use cases. In this context, brands find themselves faced with onerous uncertainty when it comes to determining their regulatory statutes.

Similarly, the media sector and, more broadly, the cultural and gaming industries already face complex issues relating to new technologies, which are likely to intensify given the growth drivers that are the digitisation of access to content and the deployment of new services and related offerings. From a legal perspective, intellectual property law and online content distribution, as well as legislation relating to digital assets and online gaming, should help to reinforce the sector’s digital trust through the legal structuring of these new activities in the digital world. That being said, it seems difficult for players in the media and entertainment sectors to wait for the projected stabilisation of the legislation and regulations in question. So, in the meantime, they are working on commercial and operational solutions that will not hamper the deployment of their activities.

In the longer term, all sectors could be confronted with the evolution of the Internet in its current form and with the emergence of new combinations of technologies and protocols. Among the issues raised, the evolution of "Web3" technology will be particularly decisive, insofar as the creation of decentralised models raises questions about the applicability of certain rules, for instance in banking law (e.g., payments that would be made using new instruments such as virtual currencies, stablecoins or digital currencies) and in intellectual property law (e.g., the presence of new NFT-type instruments in a decentralised universe).

In light of disruptive technology and the emergence of new use cases, numerous other sectors must now start thinking about the legal mechanisms that will enable them to secure the value of their activities and improve their protection vis-à-vis their commercial partners and technology providers. By identifying and managing the new risk factors associated with this new phase of digital transformation, they will be able to gain and optimize their customers’ trust.