HomeInsightsEuropean Commission publishes proposals for new Data Act

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In February 2020 the Commission published its Data Strategy, setting out a vision for the data economy where data flows between countries and sectors in the Single Market with fair, practical and clear rules for access and use and in full respect of European values and rules, including the GDPR and the E-Privacy Directive (to be replaced by the E-Privacy Regulation).

The Strategy contained a legislative initiative to complement the Data Governance Act to address the difficulties of access to and use of data in specific situations, including in a business-to-business context. The Commission has now published its proposals for this legislative initiative in the form of a new Data Act, which sets out new rules on who can use and access data generated in the EU across all economic sectors.

The aim of the Data Act is 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. The Commission says that it will lead to new, innovative services and more competitive prices for after sale services and repairs of internet connected goods. This is the final horizontal building block of the Data Strategy and, the Commission says, will play a key role in digital transformation in line with the 2030 digital objectives.

The Commission sees the vast, ever-growing volume of data as “untapped potential”, saying that 80% of industrial data is never used. The Data Act addresses the legal, economic and technical issues that lead to data being underused. The new rules will make more data available for reuse and are expected to create €270 billion of additional GDP by 2028.

The proposals include:

  • 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 aftermarket or other data-driven innovative services; it maintains incentives for manufacturers to continue investing in high-quality data generation by covering their transfer-related costs and excluding the use of shared data in direct competition with their product;
  • measures to rebalance the negotiation power of SMEs by preventing abuse of contractual imbalances in data sharing contracts; the Data Act will shield them from unfair contractual terms imposed by a party with a significantly stronger bargaining position; the Commission will also develop model contractual terms in order to help companies 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 are not otherwise available; data insight is needed to respond quickly and securely, while minimising the burden on businesses; and
  • 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 (06/9/EC), which was created in the 1990s to protect investments in the structured presentation of data. It clarifies that databases containing data from Internet-of-Things devices and objects should not be subject to separate legal protection. This will ensure they can be accessed and used.

The Commission says that under the new Act, consumers and businesses will be able to access the data from their device and use it for aftermarket and value-added services, such as maintenance. By having more information, consumers and users such as farmers, airlines or construction companies will be able to take better decisions such as buying higher quality or more sustainable products and services, contributing to the Green Deal objectives.

Further, the Commission says, business and industrial players will have more data available and benefit from a competitive data market. Aftersales 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.

In support of the European Strategy for Data, the Commission has also published an overview of the common European data spaces that are being developed in various sectors and domains. To read the Commission’s announcement in full and for links to all relevant documents, click here.

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