EU Data Act finalised

June 30, 2023

The European Data Act has been finalised between the European Parliament and the Council of the EU. It was originally proposed by the European Commission in February 2022. It says that it is needed because the full value of data in the European economy is not being reaped due to several factors.

Key issues include the lack of clarity regarding who can use and access data generated by connected products, the fact that SMEs are frequently not in a position to negotiate balanced data-sharing agreements with stronger market players, barriers to switching between competitive and trustworthy cloud and edge services in the EU, and the limited ability to combine data emanating from different sectors.

The Data Act therefore aims to boost the EU’s data economy by unlocking industrial data, optimising its accessibility and use, and fostering a competitive and reliable European cloud market. It seeks to ensure that the benefits of the digital revolution are shared by everyone.

Its key provisions include:

  • Measures that enable users of connected devices to access the data generated by these devices and by services related to these devices. Users will be able to share such data with third parties, boosting aftermarket services and innovation. Simultaneously, manufacturers retain incentives to invest in high-quality data generation while their trade secrets remain protected.
  • Measures to provide protection from unfair contractual terms that are unilaterally imposed. These aim to safeguard EU companies from unjust agreements, fostering fair negotiations and enabling SMEs to participate more confidently in the digital marketplace.
  • Mechanisms for public sector bodies to access and use data held by the private sector in cases of public emergencies such as floods and wildfires, or when implementing a legal mandate where the required data is not readily available through other means.
  • New rules that grant customers the freedom to switch between various cloud data-processing service providers. These rules aim to promote competition and choice in the market while preventing vendor lock-in. Additionally, the Data Act includes safeguards against unlawful data transfers, seeking to ensure a more reliable and secure data-processing environment.
  • Measures to promote the development of interoperability standards for data-sharing and data processing, in line with the EU Standardisation Strategy.

Next steps

The political agreement reached by the European Parliament and the Council is now subject to formal approval by the two co-legislators. Once adopted, the Data Act will enter into force on the 20th day following its publication in the Official Journal and will apply 20 months after its enters into force.