TopTier Newsletter - September 2024

This issue has been edited by Laura Sánchez with contributions from the Data Centre's team.

In this edition, we explore a range of topics, including regulations, legal requirements and investment opportunities across various European countries. We also delve into data centre management in Singapore and the burgeoning data centre market in Brazil.

Please get in touch if you would like to discuss any of the issues raised in these articles, or visit our webpage for more information about Bird & Bird’s International Data Centre Group.

Click on the links below to jump to the respective article:

Contents

1. The EU digital services act & the terrorist content online regulation? 
   
2. The rise of data centres in Spain
   
3. Challenges to the development of new data centres in Germany 
4. Data centres & waste heat
   
5. Investing in data centres
   
6. Management of data centres in Singapore - Energy Use
   
7. The expansion of the data centre market in Brazil: current trends and future perspectives
   
8. Events

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The EU Digital Services Act & the Terrorist Content Online Regulation

Why should data centres, cloud services and other hosting providers care about these laws?

Digital infrastructure may not the first sector that comes to mind when considering two of the new EU content laws, the Digital Services Act ("DSA") and Regulation 2021/784 on addressing the dissemination of terrorist content online (the "TCOR"); most people will think of social media platforms or large marketplaces. However, data centre operators, cloud services and other hosting services providers fulfil an important function in their hosting of data and content used in the EU, and many of their customers and partners are also within the scope of the DSA and the TCOR. Consequently they have direct and indirect legal obligations under these laws and need to take account of them in their compliance programmes and business models.

Read the full article

The rise of data centres in Spain

An opportunity for Power Purchase Agreements (PPAs) and price cannibalisation mitigation

The exponential growth in global data consumption, driven by the eruption of artificial intelligence, has brought data centres into the focus of investors. In this context, Spain is emerging as a relevant market for data centre investments. This is primarily attributed to its strategic geographical location, offering substantially lower energy and land costs compared to other major cities like Frankfurt, London, Amsterdam, Paris or Dublin.

Read the full article

For more information, please contact José de Santiago and Jorge Gómez.

Challenges to the development of new data centres in Germany

Energy supply shortages and urban planning requirements

Finding of suitable locations for the development of new data centres in or around the metropolitan areas of Germany is becoming increasingly challenging for data centre developers, due to two main reasons: a shortage of available electrical energy and hurdles in obtaining relevant permits.

For more information, please contact Dr. Dirk Barcaba and Elie Kaufman, LL.M. 

Data centres & waste heat

An overview of the legal requirements for waste heat utilisation

Data centres consume a lot of electricity, accounting for almost 3% of total electricity demand across the EU, and this proportion is likely to increase further. The amended Energy Efficiency Directive now also focuses on the energy efficiency of data centres, among other things. As part of the assessment and improvement of their energy efficiency, waste heat and its utilisation are also at the forefront. This is because the IT infrastructure in data centres produces a lot of waste heat. Up to now, this waste heat has essentially been released into the environment unchanged, but this is set to change.

For more information, please contact Anja Holtermann, LL.M. and Dr. Matthias Lang.

Investing in data centres: understanding Permanent Establishment issues

Corporate Income Tax 

Before investing in data centres, it is crucial to understand the concept of Permanent Establishment (PE) as interpreted by the tax authorities where the data centres have to be located, especially in the context of the digital economy. 

For more information, please contact Giuliana Polacco and Andy van Esdonk.

Management of Data Centres in Singapore – Key Legal Issues Part 1 – Energy Use

Data centres are the bedrock for the global digital economy and are built to run ceaselessly 365 days a year, 7 days a week, 24 hours a day. The operation of a data centre (DC) in Singapore involves a fusion of workflows and processes spanning for instance:

• Leasing of real estate
  
• Construction and maintenance of DC infrastructure,
  
• Procurement of power to serve the DC
  
• IT systems architecture design and security
  
• Day to day regulatory compliance
  
• Storage of data and backup policies
  
• Management of services

In Part 1 of this series of articles, we provide an overview of the key legal issues that centre around the all-too-critical energy usage for the operation of DCs in Singapore.

For more information, please contact Sandra Seah.

The expansion of the data centre market in Brazil

Current trends and future perspectives

The data centre market has been experiencing rapid global growth, driving the demand for new constructions and ventures with significantly larger storage capacities. This surge is largely attributed to the exponential rise of Artificial Intelligence (AI) and the resulting need for advanced virtual storage solutions.

For more information, please contact Leonardo Toledo da Silva and Mateus Pires Zottarelli.

Events

Decrypting Data and AI in Hotels

24 September
09:00 - 10:30  BST
Webinar
 
Bird & Bird, together with our friends at HVS, AlixPartners and EP Business in Hospitality, are pleased to invite you to join us for our 21st webinar together on Tuesday 24 September.

The use of data and technology has been a constant in the hotel world in recent decades but, with the advent of novel applications of AI analytics and targeting to drive growth, it has moved right to the top of the strategic agenda. Whilst the apparent potential for the use of data is growing exponentially, hoteliers and investors are grappling with how to drive practical benefits and create tangible value from this in the real world. In addition, the risks associated with managing and protecting data are only increasing and the regulatory environment becoming more complex. 

This webinar aims to help hoteliers and investors to make the most of data to create value and also to manage the associated risks. 

Navigating regulatory and operational challenges in the European data centre industry

14 November
15:30 - 21:00  GMT
In-person

We are pleased to invite you to our data centres in-person event, where we will focus on the entire value chain from equity investment to the day-to-day operation of data centre and how to overcome challenges to keep the industry moving forward at pace. You will receive:

• A keynote talk from leading industry figure.
  
• Analysis of major trends in the sector.
  
• A snapshot of the new and upcoming major regulations.
  
• A chance to discuss with our panellists and presenters.

Please join us at our London office on Thursday 14 November for an afternoon of interesting discussions. The meeting will be followed by networking drinks. 

Bird & Bird's TechLaw Day 2024

10 December
09:00 - 20:00  GMT
In-person

This year, we are hosting our 18th annual TechLaw Day event at the iconic St Pancras Renaissance Hotel on 10 December from 9:00 – 17:00 GMT. It promises to be a day filled with updates, insights, and conversations about significant technology trends and their interplay with legal developments.

As always, we will be looking forward to bringing together a community of legal, technology and business experts to share their insights.

We look forward to welcoming you!