In last week’s blog, we discussed developing trends in e-discovery law in the Asia-Pacific region. This week, we explore five trends that will continue to spur the growth of e-discovery in this region over the next few years.
- Regulatory Authorities Are Cracking Down on FCPA Violations
During 2013 and 2014, Asia had 115 overseas anti-corruption and anti-bribery investigations pending—more than twice the number of any other region. Africa and the EU trailed behind significantly, with 44 and 19 investigations, respectively. Asia also had the greatest number of enforcement actions (14). The increase in investigations can be attributed to, in part, the compliance risks posed by Asian markets’ local laws, regulatory frameworks and customs, especially the use of third-party agents.
- Patent Litigation Is on the Rise
Some Asian governments are stepping up enforcement and licensing practices in an effort to foster the growth of domestic companies. They are using antitrust measures to lower the cost of access to patent technology developed by foreign competitors. For instance, earlier this month, China’s Provisions on the Prohibition of the Abuse of Intellectual Property Rights to Eliminate or Restrain Competition became effective. These broad rules prohibit members of patent pools—consortia of patent owners that cross-license patents—from reaching monopolistic agreements, among other strict measures. Other such amendments to China’s Patent Law have also been proposed.
- Greater Transparency Into Asian Banking Practices
In 2014, the Foreign Account Tax Compliance Act (FATCA) went into effect. This law requires foreign financial institutions to share information about their American clients with the U.S. government or face a 30% withholding tax on all U.S.-sourced transactions. The Organization for Economic Co-Operation and Development, of which China is a member, has also agreed to implement a Common Reporting Standard for Automatic Exchange of Financial Information, which mimics FATCA. The Standard will be implemented in 2017 by early adopter states, which will likely lead to additional investigations.
- Rising Chinese Outbound Investment
Chinese investment overseas exceeded inbound investment for the first time in 2014, increasing 31 percent from the prior year. The continuing integration of Chinese and foreign economies, and particularly the presence of Chinese-owned businesses in the United States, will drive cross-border disputes and litigation.
- Growth of Data Centers, Digitization and Privacy Regulations
According to various research firms, data center capacity is expected to expand markedly in Asia through at least 2016. Currently, China holds approximately 5 percent of global data center space, with a projected compound annual growth rate in data capacity of up to 25 percent. With stricter privacy regulations coming out of APAC, many organizations are launching data centers in the country, including Amazon, IBM, and CenturyLink. Furthermore, forecasts expect the APAC region will become the busiest e-commerce region in the world by 2018, given trends toward digitization, including mobile commerce, smart infrastructure, business intelligence and the need for localized eDiscovery services.
As these five drivers demonstrate, if you build data, e-discovery will come.
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