Vulcan Insight | EU strikes a deal on the Data Act

Following the interinstitutional negotiations on Tuesday 27 June 2023, EU legislators struck a deal on a new EU Data Act that aims to regulate access and sharing capabilities of AI generated data by connected devices. 

The proposed EU Data Act aims to unlock non-personal industrial machine and device generated data ranging from industrial roots to dishwashers and various house appliances. This new law will allow for users of said connected devices to get easier access to machine generated data and will allow users to share the data with other service and repair providers other than just the manufacturers. This aims to induce competition with regards to the aftermarket of services and products. Margrethe Vestager, Executive Vice-President for a Europe Fit of the Digital Age, claimed the act will “optimise data use by improving data accessibility”,which in turn will benefit our digital transformation. The Data Act equally aims to address the question of who possesses the data generated by connected devices, as there seems to be a lack of ambiguity with regards to who receives and controls the data.

Additionally, the Data Act will attempt to boost the EU’s data economy by introducing the following measures:

• Increasing access to machine generated data.
• Including measures that provide protection from unfair contractual terms.
• Providing mechanisms that will allow for private data sharing to certain public bodies.
• Allowing consumers to change their cloud data-processing services providers.
• Promoting interoperability standards.

The introduction of the new Data Act could allow for the EU to become more competitive in the technological industry. The EU claims they do not want to miss the next wave of data, whilst comparing their processes to that of U.S companies, such as Meta and Google. These companies have efficiently managed to harness personal data effectively, which has generally helped the U.S win the battle over consumer tech.

The Data Act serves as a response of the untapped potential of industrial data. Studies have shown only 20% of machine or device generated data is being used. Thierry Breton, EU’s Internal Market Commissioner, expressed concern following the lack of use of industrial data claiming that “it’s holding back huge potential for growth and innovation.”Whilst further alluding to the proposed data strategy, Breton highlighted that it will serve a purpose of unlocking a “wealth of big data and set out how that data should be shared, store and processed.” Interestingly, EU countries were seeking to become exempt from data-sharing “under exceptional circumstances”, however final deal manufacturers are allowed to refuse certain data requests if serious economic losses are presented.

The agreement reached by the European Parliament and the Council is subject to formal approval. Once approved, the act will then become effective after 20 days following its publication in the Official Journal.