On 27 June 2023, the European Council and European Parliament reached a provisional agreement on the Data Act (the Agreement), a regulation aimed at establishing harmonised rules on “fair access to and use of data”, which was proposed by the European Commission in February 2022. The new legislation aims to make the EU a leader in the data-driven society by unlocking the economic potential of data and technologies, fostering competition and enhancing data accessibility.

The Internet of Things (IoT) has sparked exponential growth and is projected to generate an enormous volume of data in the coming years. Despite this, a considerable amount of industrial data remains untapped, holding unrealised possibilities. This legislation aims to unlock and optimise the use of industrial data, foster a competitive European cloud market, and ensure the benefits of the digital revolution are shared by everyone.

The key provisions of the Agreement, at a glance:

• Scope of the legislation – the Agreement clarifies the scope of the Data Act by allowing users of connected devices to gain access to data generated by their use and by moving the focus to the functionalities of the IoT data collected by connected products rather than the products themselves.
• Data Sharing and Compensation – the Agreement includes measures to prevent abuse of contractual imbalances in data sharing contracts. It also provides guidance on fair compensation for businesses sharing data and establishes mechanisms for dispute settlement.
• Protection of trade secrets – the Agreement ensures the protection of trade secrets and intellectual property rights, while providing safeguards against potential misuse of data.
• Public sector access – the Agreement provides the means for public sector bodies to access and use private sector data in exceptional circumstances such as public emergencies or tasks in the public interest.
• Switching between service providers – the customers will be able to switch between different data-processing service providers (cloud providers) and additional safeguards will be put in place against unlawful data transfers.
• Interplay with existing legislation – the Agreement clarifies the relationship between the Data Act, the Data Governance Act and the General Data Protection Regulation (GDPR).

The political agreement is subject to formal approval by the European Parliament and the Council of the EU. Upon its adoption, the Data Act will enter into force 20 days following its publication in the Official Journal and become applicable 20 months later.

The full text of the proposal for the Data Act can be found here.

The European Council’s press release can be found here.

The European Commission’s press release can be found here.

Our previous blog post on the Data Act can be found here.