In June 2023, policy makers reached an agreement on the EU Data Act, initially proposed in February, 2022.
The European Union’s Data Act, proposed in February 2022, is set to revolutionise the EU data economy. The Act is designed to foster data sharing and use across the EU, leveraging data as a critical asset in boosting economic growth, innovation, and competition. The Act seeks to streamline the use of data across the EU by establishing uniform rules for data access and use. It aims to create a ‘data altruism’ framework that encourages organisations to voluntarily share data for the common good. The Act also includes provisions to protect data providers and ensure fair competition. On 23 February 2022, the European Commission published the long-awaited Data Act, a proposal for regulation aimed at establishing a harmonised framework for industrial, non-personal data sharing in the European Union, and on 27 June 2023, EU policymakers reached a political agreement on the Data Act. The Data Act serves as a complement to the Data Governance Act which entered into application on 24 September 2023
The EU Data Act seeks to regulate data intermediaries, enhance non-personal data sharing, and promote fair competition and innovation.
A fundamental aspect of the EU Data Act is to address the power imbalance in the data market. It proposes to regulate data intermediaries and gatekeepers, preventing them from favouring their own services or leveraging their position to exploit data providers. This move is expected to open up new opportunities for small and medium enterprises (SMEs), allowing them to compete on a level playing field. Moreover, the Act extends the concept of data sharing beyond personal data to include non-personal data, such as machine-generated data. This approach recognizes the increasing importance of non-personal data in the digital economy, particularly in sectors such as AI, IoT, and Industry 4.0. By facilitating the sharing and use of such data, the Act could significantly boost innovation and economic growth.
The Data Act includes several provisions in order to achieve its aggregate aim.
Earlier this year, the European Parliament and Council released the agreed text on the Data Act. The Data Act introduces several provisions:
- It incorporates steps to allow users of connected devices to access data produced by these devices and related services. Users will have the freedom to share this data with third parties, stimulating services post-sale and innovation. At the same time, manufacturers are encouraged to continue investing in quality data generation, with their trade secrets remaining secure.
- The Act introduces protections against unfair contract terms that are imposed unilaterally. These protections are designed to shield EU businesses from unfair agreements, fostering fair negotiations and enabling Small and Medium-sized Enterprises (SMEs) to engage more confidently in the digital marketplace.
- The Act establishes mechanisms for public sector entities to access and utilize data owned by the private sector in situations of public emergencies, such as floods or wildfires, or when executing a legal mandate where the necessary data is not easily accessible by other means.
- New regulations are introduced that allow customers to switch between different cloud data-processing service providers freely. These regulations are designed to encourage competition and choice in the marketplace while avoiding vendor lock-in. The Data Act also incorporates safeguards against illegal data transfers, ensuring a more secure and reliable data-processing environment.
- The Act includes measures to encourage the development of interoperability standards for data sharing and processing, in accordance with the EU Standardisation Strategy.
Upon approval, the EU Data Act will boost economic growth and innovation through enhanced data sharing.
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 become applicable 20 months after the entry into force. The Data Act aims to create a level playing field for all digital service providers, promote competition, and ensure the protection of fundamental rights. The agreed text will now undergo further scrutiny and negotiation before becoming law. The EU Data Act promises to be a major catalyst for the European data economy. By fostering data sharing and use, it could significantly boost economic growth and innovation. However, its success will depend on careful implementation and the active involvement of all stakeholders. The Act represents a significant step forward in the EU’s digital agenda, demonstrating the EU’s commitment to leveraging data as a critical asset for economic growth and competition.
If you are a small or medium sized business, looking to achieve compliance, Aphaia‘s team of experts can provide tailored solutions to help improve your data protection practices and act as your outsourced DPO. Contact Aphaia today to find out more.