European Union Information Technology Data Act

Following GDPR that regulates personal data, this Act will, for the first time, regulate non personal data in the EU and unlock opportunities by removing barriers to its reuse.

On June 26,2023 the European Council and Parliament reached a provisional agreement on the final legislative of the Data Act. The provisional agreement must now be endorsed by the Council and the European Parliament. It must then be adopted by both institutions, and once adopted will enter into force 20 days after publication in the Official Journal and become applicable after 20 months.

Serving to compliment the General Data Protection Regulation and the Data Governance Act, if implemented in its proposed form the Data Act would establish harmonized rules regulating the ownership of industrial, non-personal data generated by internet connected devices and provide rules for data sharing across economic sectors. The data act would give both individuals and businesses more control over their data through a reinforced portability right, copying or transferring data easily from across different services, where the data are generated through smart objects, machines, and devices. The new legislation seeks to empower consumers and companies by giving them a say on what can be done with the data generated by their connected products.

The Act’s primary provision transfers ownership over data generated by internet-connected devices to consumers and businesses, increasing data availability. It would also enforce portability rights and interoperability standards to enable streamlined switching between data processing services, thus granting consumers and businesses more control over their data. Additional safeguards would be imposed to prevent unlawful data transfers, respect intellectual property rights, and shield trade secrets.

To incentivize cross-sectoral data sharing, the Act provides for reasonable compensation to businesses for making data available and establishes secure dispute settlement mechanisms.  The Act also seeks to increase competition and involve more economic actors in the EU’s data economy by combating contractual imbalances in data sharing contracts through increased negotiating powers for small and medium-sized enterprises (SMEs). Another provision concerns cloud operators: the Act would make it easier to transfer data from one cloud-service provider to another. It would no longer be possible to charge any costs if a business wishes to switch providers and remove its data from its current cloud-service provider.

Lastly, the Data Act secures means for public sector bodies to access private sector data in cases of public emergency, enabling governments to efficiently formulate effective, evidence-based responses to crises.

This legislation seeks to create opportunities for customized services at lower cost, and to allow for the development of aftermarket and value-added services. In addition to improving the competitive landscape for SMEs, these services seek to extend the lifespan of connected products and enable users to make better purchasing decisions by opting for more sustainable and durable products, advancing objectives of the Green Deal. Likewise, the availability of data on the functionality of industrial equipment will enable businesses to improve operational cycles and supply chain management.

Despite these advantages, it remains unclear how certain provisions of the Data Act will work in practice: with potential restrictions on transfers of industrial data outside the EU, companies with global footprints may experience challenges in their ability to share data between EU and non-EU operations. Additionally, the Data Act would prevent sharing industrial data with “gatekeepers,” (i.e., large online platforms). Meanwhile, gatekeepers would be required to make their data available in certain circumstances.

For more information, please contact the Commercial Service at the US Mission to the EU at office.brussels@trade.gov

Additional Resources:

Data Act – European Commission Press Release
Data Act – European Commission Explanation
Data Act News Article