The EU’s Data Act: Paving the Way for a Fair and Innovative Digital Future 

In a rapidly evolving digital landscape, the EU countries are taking a significant step towards shaping a fair and innovative data-driven economy with the introduction of the Data Act. The proposed legislation, a key component of the 2030 digital objectives, aims to redefine how data is accessed, used, and shared across all economic sectors within the European Union (EU). This article explores the key aspects of the Data Act and its potential implications for businesses, consumers, and society as a whole. 

Addressing Underutilization of Industrial Data: 

The Data Act acknowledges the nature of data, that it can be accessed and consumed by many simultaneously without depletion. A significant portion of industrial data remains underused, with 80% going untapped. The Data Act seeks to address the legal, economic, and technical challenges hindering the effective utilization of data. 

Key Proposals of the Data Act: 

Access to Connected Device Data: The Data Act proposes measures to empower users of connected devices, allowing them access to data generated by these devices. This movement challenges the current exclusivity held by manufacturers in harvesting such data and opens opportunities for aftermarket and other data-driven innovative services. 

Empowering SMEs: The legislation aims to rebalance negotiation power for Small and Medium-sized Enterprises (SMEs) by preventing the abuse of contractual imbalances in data-sharing contracts. This protection shields SMEs from unfair terms imposed by more dominant parties, fostering a more equitable data-sharing environment. 

Public Sector Access in Emergencies: The Data Act includes provisions for public sector bodies to access and use private sector data in exceptional circumstances, particularly during public emergencies such as floods or wildfires. This ensures timely and secure access to critical data while minimizing the burden on businesses. 

Cloud Service Provider Switching: New rules are proposed to enable customers to switch between different cloud data-processing service providers effectively. Safeguards against unlawful data transfer are also set in place, promoting data security and privacy. 

Review of Database Directive: The legislation reviews aspects of the Database Directive, clarifying that databases containing data from Internet-of-Things (IoT) devices and objects should not be subject to separate legal protection. This ensures accessibility and usability of IoT data. 

Expected Impact: 

The Data Act is projected to unlock substantial economic potential, with an estimated €270 billion of additional GDP by 2028. Consumers and businesses will benefit from increased access to data, enabling the development of personalized services and fostering competition in the data market. 

Consumer Empowerment and Sustainability: 

With increased access to device data, consumers and businesses can make more informed decisions, contributing to objectives such as the Green Deal. Farmers, airlines, and construction companies, for example, can utilize data for predictive maintenance, leading to better choices in purchasing higher quality and more sustainable products and services. 

Boosting Innovation and Competition: 

The Data Act is poised to fuel innovation by providing businesses and industrial players with more data. Aftermarket service providers can offer personalized services, competing on equal footing with manufacturers. Additionally, the combination of data sets may give rise to entirely new digital services, further driving innovation. 

What is the difference between the Data Act and GDPR 

The Data Act differs from the GDPR, primarily in that while the GDPR regulates solely personal data, the Data Act also regulates non-personal data, including almost any type of digitised information and this, whether or not the data is anonymous. 

Conclusion: 

The Data Act stands as a pivotal piece in the European Commission’s strategy for data, reinforcing the EU’s commitment to becoming a leader in the data-driven society. By addressing issues of access, fairness, and innovation, the legislation is set to pave the way for a robust, innovative, and sovereign European digital economy. As the digital transformation continues, the Data Act marks a significant milestone in shaping a future where data is harnessed for the benefit of all. 

More information and references:

EU: The Data Act

EU: Comission welcomes political agreement on rules for a fair and innotative data economy

EU: Data Act — Factsheet | Shaping Europe’s digital future (europa.eu)

Ministry of Finance (Finland): EU digital statutes lay the ground rules for operating in the digital age

Author:

Elias Laitala

Legal Trainee, Oulu

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