DENMARK Trends and Developments Contributed by: Simon Milthers, Thomas Bøgedal Kristiansen, Mikkel Friis Rossa and Emil Steenberg, Bech-Bruun
resilience across key sectors, mandates that businesses implement stringent security meas- ures and report significant cyber incidents. NIS2 is particularly relevant for companies operating in sectors heavily reliant on ICT (eg, energy, transport, banking, and healthcare). As a result, tech companies involved in M&A transactions must prioritise cybersecurity compliance to avoid potential disruptions and penalties. Similarly, DORA imposes robust governance frameworks on the EU’s financial sector and ICT service providers, requiring them to man- age ICT risks effectively. This includes incident management, technology testing, and ensuring third-party ICT suppliers meet stringent infor- mation security standards. For tech companies, adherence to DORA is not just a regulatory requirement but a strategic imperative neces- sary to maintain operational integrity and inves- tor confidence. Moreover, the evolving regulatory framework around AI – with the AI Regulation imposing stringent requirements on high-risk AI systems – underscores the need for tech companies to stay ahead of compliance mandates. The AI Regulation introduces a risk-based approach to AI technologies, categorising them based on their potential impact on public health, safety and fundamental rights. High-risk AI systems, such as autonomous vehicles and medical devices, will be subject to rigorous testing and documentation requirements. Additionally, the regulation addresses generative AI, mandat- ing transparency and measures to prevent the generation of illegal content. Failure to adhere to these regulations can result in significant penal-
ties, which emphasises the importance of com- plying with new cybersecurity and AI standards. As regulatory requirements become more com- plex, tech companies must prepare to navigate these changes to ensure they meet compliance obligations. This preparation is essential not only for mitigating risks but also for capitalising on the opportunities that arise from a well-regulated and secure technological environment. By stay- ing informed and proactive, tech companies can position themselves for success. In addition to regulatory compliance, tech com- panies may also consider the broader impli- cations of these regulations on their strategic objectives. By way of example, the emphasis on cybersecurity and data protection can enhance a company’s reputation and trustworthiness, making it more attractive to investors such as private equity and venture capital funds. Further- more, the ability to demonstrate compliance with stringent AI regulations can position a company as a leader in ethical AI development, resulting in new market opportunities and fostering inno- vation. In summary, the increasing regulatory framework in the tech sector presents both challenges and opportunities for companies involved in M&A activities. By prioritising compliance, investing in robust cybersecurity measures and leveraging data responsibly, tech companies can navigate the regulatory landscape effectively and achieve long-term success. The key to thriving in this environment lies in staying ahead of regulatory changes, adopting best practices and fostering a culture of compliance and innovation.
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