The Data Act Proposal ‒ A Paradigm Shift?
Together with the rules on personal data contained in the Regulation of the European Parliament and of the Council on European data governance (Data Governance Act), the EU Commission’s proposal for a Data Act is intended to provide a legal framework for the European data economy. The Data Act: Proposal for a Regulation on harmonised rules on fair access to and use of data includes rules that simplify access to data, prohibit unfair contract clauses and facilitate switching between providers of data processing services, among many other things. The objective is nothing less than to achieve a fair and open data economy and thereby drive the modernization of the EU in this sector.
Access to data
When concluding contracts, users (also owners, lessees, etc.) of data-generating products are not only to be informed about the data generated when using the products or related services, but also must receive direct access to the data. If this is not possible, the data must be made available to the user by the data owner immediately and, as a matter of principle, free of charge, if necessary also continuously and in real time. The user may also share data with third parties, with the exception of large online-platform operators (“gatekeepers”), thereby allowing for a competitive offer of aftermarket services, as well as broader data-based innovation and the development of products or services unrelated to those initially purchased or subscribed to by the user.
The proposal also provides that in certain situations where there is an exceptional need for data, public sector bodies are to be given access to such data by the owner.
In addition, manufacturers of data-generating products and providers of related services are to be obligated to design or provide these products or services in such a way that user-generated data will be accessible to the user easily and quickly. In order for the data owner to use non-personal user-generated data, a contractual agreement with the user is required.
Prohibition of unfair contractual terms and facilitation of switching between service providers
Given that, due to the lack of Europe-wide recognized provisions under property law, data access and data use are usually regulated by contracts, the Data Act also includes a series of contractual terms that are deemed unfair to micro, small and medium-sized enterprises (SMEs) and therefore may not be legally agreed upon.
Moreover, the Data Act proposal includes provisions that make it easier for customers to switch data processing service providers, such as cloud or edge services, by obligating providers to remove legal, technical and economic obstacles in this context. This affects termination regulations and the costs of switching as well as interoperability and interfaces.
Interoperability and Data Protection
An important chapter of the proposal deals with the interoperability of data and data processing services, for which basic requirements are to be defined. For this purpose, harmonized standards are to be developed and the EU Commission is to be empowered to make further specifications. The proposal also lays down essential requirements regarding smart contracts for data sharing.
Another interesting chapter obligates providers of data processing services to protect non-personal data from access by third parties by means of technical, legal and organizational measures. The proposal also specifies that administrative or judicial decisions from third countries may only enable access to such data under certain conditions.
Concluding Remarks
In a time of progressing digitalization, in which digital services are gaining importance, the number of goods containing digital elements are increasing, and the Internet of Things is assuming a more and more concrete form through technological progress, this projected legislation can rightly be considered a milestone. It is to be hoped that the planned legal framework, widely referred to as a “paradigm switch”, will indeed bring the sorely needed impetus for Europe’s inadequately equipped data economy.
Please note: This blog merely provides general information and does not constitute legal advice of any kind from Binder Grösswang Rechtsanwälte GmbH. The blog cannot replace individual legal consultation. Binder Grösswang Rechtsanwälte GmbH assumes no liability whatsoever for the content and correctness of the blog.