SWITZERLAND Law and Practice Contributed by: Marco Toni, Gilles Pitschen and Leonard Baumann, Loyens & Loeff
control on incoming cross-border investments will also apply to private, non-state investors. Depending on the final scope of the new legisla- tion, it could make investments in Switzerland – including the technology sector – less attractive. The new legislation is not expected to come into force before 2026. Finally, it is worth noting that the EU AI Act entered into force on 1 August 2024. With its extraterritorial reach, similar to the GDPR, it also applies to Swiss companies whose AI systems are available in the EU or whose AI-generated output is used in the EU. Currently, Swiss law does not regulate AI. However, in November 2023, the Federal Council mandated the Fed- eral Department of the Environment, Transport, Energy and Communications to prepare a report on AI regulatory approaches that are compatible with the EU AI Act and the Council of Europe’s AI Convention. This indicates that Switzerland will soon regulate the use and application of AI. 9. Due Diligence/Data Privacy 9.1 Technology Company Due Diligence Publicly listed companies are allowed to provide due diligence information as long as the provi- sion of such information is in the best interest of the company and complies with applicable law and contractual obligations – in particular, with insider trading rules, ad hoc disclosure obliga- tions, confidentiality undertakings, data privacy obligations, and the principle of equal treatment of shareholders. The permissibility of any dis- closure of due diligence information must be analysed on a case-by-case basis in relation to the specific information and bidder, as well as the intended transaction and its implications for the company.
Before any confidential information is disclosed, the company should ensure that the bidder has entered into appropriate non-disclosure under- takings and that the due diligence information is only disclosed on a limited and need-to-know basis. Information that is sensible from a com- mercial or antitrust perspective should be dis- closed to clean teams only. The company has no general obligation to pro- vide due diligence information to potential or actual bidders. However, if a company has pro- vided or will provide due diligence information to actual or potential bidders, all actual (but not other potential) bidders have a right to receive the same information. The level of technology due diligence depends on the specific IP portfolio. Generally, a com- pany may be allowed to disclose IP information that is already public in the relevant IP registers. However, particular attention should be paid in relation to trade secrets and other commer- cially valuable confidential information, including source codes. In technology companies, such information is likely to qualify as insider infor- mation and therefore may not be disclosed in connection with a due diligence. 9.2 Data Privacy Any processing of personal data of Swiss data subjects must comply with the provisions of the Swiss Federal Data Protection Act (DPA). Gen- erally, it is noted that – on the one hand – the processing must be based on one or more of the legal bases provided for in the DPA. In the context of a due diligence exercise, the seller and the buyer usually may rely on the legal basis of safeguarding their legitimate interests. On the other hand, the seller and the buyer must comply with the following general principles that apply to any processing of personal data.
360 CHAMBERS.COM
Powered by FlippingBook