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Finland: New Tech haven

July 2009 by Annabelle Richard and Andreea Sabin, Ichay & Mullenex Avocats

Even among its peers in the western world, Finland is regarded as a highly technologically advanced country. This is not surprising considering that a large part of Finland’s economy is based on high-technology manufacturing.

Andreea Sabin

Annabelle Richard

The state-operated Statistics Finland reports that around 92 % of Finnish households have a mobile phone and 58 % have Internet connections at home. In the spring of 2008, 83% of people between the ages of 16 and 74 said they had used the Internet during the three months prior to the survey. This is an increase of 4% from the previous year.

Additionally, Statistics Finland reports that at the end of 2008, Finland had 490,000 mobile broadband subscriptions, an exponential increase of 350,000 new subscriptions added over the course of only one year.

One of the direct results of such widespread access to technology is the notably high rate of telecommuting (a work arrangement permitting flexible hours and locations, including working from home or distributing work beyond the confines of traditional, physical offices). states that 22,8% of employees in Finland telecommute, compared to only 6% in France.

Such impressive penetration of new technologies in Finnish households and industries is vastly encouraged by a complete and efficient legal arsenal adapted to such new technologies. Intellectual property, Internet and data protection regulations are generally comparable to regulations implemented in other European countries.

Moreover, Finland has adopted a thorough national legislation to fight cybercrimes. This legislature is necessary to protect and ensure safety and security in light of the development of new technologies. Cybercrimes include fraud, data and communications offences, intercepting messages and other information, introducing computer viruses and other types of malware in order to steal data, etc. Finland’s penal code addresses the many broad elements of cybercrime.

For another indication that Finland is very technologically advanced, one only has to look at the state-issued identification card. Making its debut a decade ago in 1999, the Finnish electronic identification card is called the Citizen Certificate. The Population Register Centre creates an electronic identity for Finnish citizens, stored on the computer chip integrated in the state-issued ID card.

The ID card is used in conjunction with a card reader and special software. In addition to storing personal data, the ID card can be used to access personal data, encrypt email messages and provide an electronic signature. The electronic signature is legally binding, just like the traditional signature. Internet services also integrate the ID card chip technology.

Electronic identity cards are valuable beyond personal use. In May 2009, a Finnish electronic ID card was used for the first time to create a company in Estonia. Normally, the process is very cumbersome, time-consuming and costly. In this case, the founders of the company did not even have to leave their desks!

The Estonian Company Registration Portal accepts digital signatures, through the use of electronic ID cards, from several countries. This system is thus far unique in Europe, and unparalleled in terms of the speed and comfort it provides for founding a company.

The European Network and Security Agency reported in February 2009 that other European countries have an electronic ID card system in place (Austria, Belgium, Estonia, Finland, Italy, the Netherlands, Portugal, Spain, Sweden and the United Kingdom). Twelve other European countries have an electronic ID system planned, among which France, Germany, Hungary, Poland and Romania. Other countries are quickly following in Finland’s footsteps!

Technological advances are not without controversy, however. One such case is the “snooping” or “Nokia” law. Signed by President Tarja Halonen in March of 2009 and taking effect on June 1, 2009, the new law’s purpose is to provide data protection for electronic communications. The more precise goal of the law is to prevent corporate espionage.

The law enables employers to verify metadata from employee emails. Metadata includes identifying the recipient of the email, the size and frequency of the messages, and whether any attachments were sent. The law does not permit reading the content of the email messages. Moreover, the law only applies to those who are suspected of having disclosed trade secrets.

This may not be shocking news when compared to a country like the United States, where employers regularly hire staff to read and analyze outgoing employee emails. However, the proposed law faced severe criticism in Finland, where many were concerned about severe infringements on the right to privacy.

This controversy was fuelled by allegations that Nokia, who had been previously accused of illegally monitoring emails of specific employees, had lobbied in favour of the law. Nokia supposedly implied a very apparent message: either the law is passed or Nokia would leave Finland. Although even Prime Minister Matti Vanhanen refused to credit these allegations, it did not stop many from speculating otherwise.

Arto Satonen, chairman of the parliament’s employment committee, defended the law. He told in February of 2009 that “Trade secrets are a serious matter for a country like Finland, whose competitiveness lies in innovations.” He further stated that, “It’s important that emails are included in the law.” This is undoubtedly true as more and more sensitive, important, even confidential information is available in an electronic or digital format.

Not even a month after its implementation, the law is already stirring up controversy, again. This time, the outcries are coming from a different source – Finland’s universities. A section of the law addresses the misuse of networks, a subject of relevance to universities trying to battle peer-to-peer traffic that often results in illegally sharing copyrighted music and other material.

The universities are rightly concerned about heavy traffic burdening the network and about protecting their images as academic institutions. However, Finland’s universities are split regarding whether implementing the new law at the university level is an appropriate solution.

Finland is committed to advancing its technological development. With this ambition come many benefits, like the electronic ID card, and also some setbacks, like trying to find the perfect balance between fostering the security required to promote economic growth versus the right to privacy, as demonstrated by the “snooping” law.

Technological developments often lead to advances in other sectors. One such area where Finland has shown significant growth is the Cleantech sector. World-wide, the Cleantech business is growing at a rate of 5 to 15 percent yearly. Finland has 1,300 Cleantech enterprises. The Finnish government created the Centre of Expertise programme OSKE, which represents the Government’s view on how to improve regional competitiveness in line with national and European policies.

The Cleantech Cluster is part of OSKE that will help small and mid-size Cleantech businesses reach an international market. Its goal is to facilitate interaction between Finnish companies and the research community in order to increase demand for their products and services, both in Finland and internationally. These businesses frequently rely on cutting-edge research findings and new technologies. The Cleantech Cluster works to ensure the future of cleantech businesses.

Overall, Finland has proven itself a highly technologically advanced country with an eye for the future. Its legal framework is well-suited to welcome innovative technological developments.

Ichay & Mullenex Avocats is a French law firm focusing on all legal issues related to the new technologies in France and abroad. They are considered experts in intellectual property and Internet law, e-commerce, online gaming, data protection. Ichay & Mullenex Avocats also assists its clients on all issues related to financing, mergers & acquisitions, restructuring, etc. and advises them on their litigation and arbitration procedures.

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