The European Commission (EC) has published proposals for a new European Data Act which aims to ensure that a wider range of stakeholders can be granted access to product usage data in order to foster competition and innovation. The legislation will also give more control to consumers to determine how data generated by their usage of products is shared.
What does this mean for automotive?
For the automotive sector this is quite big news and responds to several years of lobbying from automotive services businesses and trade bodies. The challenge is that the major car manufacturers (OEMs) have an unfair competitive advantage in being able to access and monopolise on data generated by customer use of their vehicles. The proposals will give non-OEM businesses potential access to such data. So what are the features of the new EU regulation?
Consumer control over connected device data
Consumers will be able to request access to the data generated by connected devices they use and share the data with third parties to obtain aftermarket and data services. The aim here is to open up the market by enabling consumers to transfer their data to a broader range of data service businesses, rather than being tied to the service offering provided by the manufacturer of the device. This has repercussions for all manufacturers of devices and connected hardware including the big non-EU data giants such as Google and Amazon.
More negotiation power for small and medium-sized businesses
The Commission hold concerns regarding the contractual arrangements implemented by OEMs and other large businesses that tie customers to using their services. The Data Act will implement new provisions that aim to ‘prevent abuse of contractual imbalances’ from large companies with a stronger bargaining position. The EC will be developing example contractual terms that it expects to see from firms in order to implement fair data sharing agreements.
Rules enabling cloud data-processing services providers
The Commission are aware of the power large data platforms have and the barriers in place currently for consumers and firms to switch data from one cloud provider to another. Cloud providers are the likes of Google, Amazon Web Services and Microsoft that provide web based services such as the platform and infrastructure to set up websites, store web data and provide analytical information.
The bigger picture
The Data Act is part of the European Data Strategy published in 2020 which aims to build on The General Data Protection Regulations (GDPR), particularly around the right of data portability and ensuring that data subjects (such as consumers) have control over their data. GDPR mostly focuses on ‘personal data’ which can be used to identify individuals. The Data Act relates to both personal and non-personal data generated by data subjects. You may be thinking why is this important now the UK has left the EU? Well given that data is easily transferrable across borders there will need to be some equivalency of the European Data Strategy in the UK. And there will be. The UK also has a National Data Strategy which is very much aligned to the direction of the EU’s Strategy with ‘improving data availability and access’ being one of its key workstreams.
The Data Act proposals will now be discussed in the coming weeks by the European Parliament, Council and Commission. Once agreed and published the regulation will immediately take effect in EU member states. The EC estimate that the Data Act will generate an additional €270bn for the EU by 2028.