27 June 2023
With a view to making the EU a leader in our data-driven society, the Council presidency and European parliament representatives reached a provisional agreement on a new regulation on harmonised rules on fair access to and use of data (data act).
Today’s agreement will accelerate our Union’s digital transformation. Once the data act enters into force, it will unlock the economic and societal potential of data and technologies and contribute to an internal market for data. It will enhance the single market, allowing data to flow freely within the EU and across sectors for the benefit of our citizens and businesses.
Erik Slottner, Swedish minister for public administration
The regulation proposes new rules on who can access and use data generated in the EU across all economic sectors. It aims to:
- ensure fairness in the allocation of value from data among actors in the digital environment
- stimulate a competitive data market
- open opportunities for data-driven innovation, and
- make data more accessible to all
The new legislation also aims to ease the switching of providers of data processing services, puts in place safeguards against unlawful data transfer by cloud service providers and provides for the development of interoperability standards for data to be reused between sectors.
The data act will 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 will empower consumers and companies by giving them a say on what can be done with the data generated by their connected products.
Main elements of the agreement
Scope of legislation
The political agreement clarifies the scope of the regulation allowing users of connected devices, ranging from smart home appliances to smart industrial machinery, to gain access to data generated by their use which is often exclusively harvested by manufacturers and service providers.
Regarding Internet of Things (IoT) data, in particular, the focus was moved to the functionalities of the data collected by connected products instead of the products themselves.
Data sharing, compensation, and dispute settlement
The text contains measures to prevent abuse of contractual imbalances in data sharing contracts due to unfair contractual terms imposed by a party with significantly stronger bargaining position.
Moreover, the text provides additional guidance regarding the reasonable compensation of businesses for making the data available, as well as adequate dispute settlement mechanisms.
Trade secrets
The agreement also ensures an adequte level of protection of trade secrets and intellectual property rights, accompanied by relevant safeguards against possible abusive behaviour of data holders.
Public sector bodies
The text provides the means for public sector bodies, the Commission, the European Central Bank and Union bodies to access and use data held by the private sector that is necessary in exceptional circumstances, particularly in case of a public emergency, such as floods and wildfires, or to fulfil a task in the public interest.
Benefits for customers
The new rules will also allow customers to effectively switch between different data-processing service providers (cloud providers) and put in place additional safeguards against unlawful data transfers.
Interplay with existing legislation
Finally, the new text clarifies the interplay between the data act and existing horizontal and sectoral legislation, such as the data governance act and the general data protection regulation (GDPR).
Next steps
Today’s provisional agreement must now be endorsed by the Council and the European Parliament. It will then be adopted by both institutions following legal-linguistic revision. From the Council’s side, the upcoming Spanish presidency intends to submit the text to member states’ representatives (Coreper) for endorsement as soon as possible.
Background
Following the data governance act adopted by the co-legislators in 2022, the data act regulation is the second main legislative initiative resulting from the Commission’s February 2020 European strategy for data, which aims to make the EU a leader in our data-driven society.
While the data governance act creates the processes and structures to facilitate data sharing by companies, individuals and the public sector, the data act clarifies who can create value from data and under which conditions. This is a key digital principle that will contribute to creating a solid and fair data-driven economy and guide the EU’s digital transformation by 2030. It will lead to new, innovative services and more competitive prices for aftermarket services and repairs of connected objects (‘Internet of Things’ / IoT).
In its conclusions of 25 March 2021, the European Council underlined the importance of digital transformation for EU’s growth, prosperity, security, and competitiveness, as well as for the well-being of our societies. In light of these ambitions and challenges, the Commission proposed on 23 February 2022 measures for a fair and innovative data economy (data act), as a follow-up to its communication of February 2020 on the European strategy for data.
- Data act, Council negotiating mandate, 22 March 2023
- Proposal for a regulation on harmonized rules on fair access to and use of data (Data Act), 23 February 2022
- Commission staff working document on common European data spaces, 23 February 2022 Data governance act, 30 May 2022
- Factpage on the European Data strategy (European Commission, background information)
- European Commission communication on a ‘European strategy for data’, 19 February 2020)
- Database directive, 11 March 1996
- A digital future for Europe (background information)