European Commission proposes new Data Act

The proposed Data Act aims to provide measures for a fair and innovative data economy

The Commission has proposed a new Data Act with new rules about who can use and access data generated in the EU across all economic sectors. The Data Act aims to ensure fairness in the digital environment, stimulate a competitive data market, open opportunities for data-driven innovation and make data more accessible for all. It is hoped that it will lead to new, innovative services and more competitive prices for aftersales services and repairs of connected devices. 

The volume of data is constantly growing, from 33 zettabytes generated in 2018 to 175 zettabytes expected in 2025. It is an untapped potential - 80% of industrial data is never used. The Data Act aims to address the legal, economic and technical issues that lead to data being under-used. The new rules aim to make more data available for reuse and are expected to create €270 billion of additional GDP by 2028.

The proposal for the Data Act includes:

  • Measures to allow users of connected devices to gain access to data generated by them, which is often exclusively harvested by manufacturers; and to share such data with third parties to provide aftersales or other data-driven innovative services. It provides incentives for manufacturers to continue investing in high-quality data generation, by covering their transfer-related costs and excluding use of shared data in direct competition with their product.
  • Measures to rebalance negotiation power for SMEs by preventing abuse of contractual imbalances in data sharing contracts. The Data Act aims to protect them from unfair contractual terms imposed by a party with a significantly stronger bargaining position. The Commission says that it will also develop model contractual terms to help such companies to draft and negotiate fair data-sharing contracts.
  • Means for public sector bodies to access and use data held by the private sector that is necessary for exceptional circumstances, particularly in case of a public emergency, such as floods and wildfires, or to implement a legal mandate if data is not otherwise available. Data insights are needed to respond quickly and securely, while minimising the burden on businesses.
  • New rules allowing customers to effectively switch between different cloud data-processing services providers and putting in place safeguards against unlawful data transfer.  

In addition, the Data Act reviews certain aspects of the Database Directive, which was created in the 1990s to protect investments in the structured presentation of data. Notably, it clarifies that databases containing data from Internet-of-Things devices and objects should not be subject to separate legal protection. This would ensure they can be accessed and used.

Consumers and businesses will be able to access the data of their device and use it for after-sales and value-added services, like predictive maintenance. By having more information, the Commission says that consumers and users such as farmers, airlines or construction companies will be in a position to take better decisions such as buying higher quality or more sustainable products and services, contributing to the EU’s Green Deal objectives.

Business and industrial players will have more data available and benefit from a competitive data market. Aftermarkets services providers will be able to offer more personalised services, and compete on an equal footing with comparable services offered by manufacturers, while data can be combined to develop entirely new digital services as well.

Published: 2022-02-24T12:00:00

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