Data Act: Right ambition to unlock data potential, but obligations would hold back Europe’s data-driven recovery

The long-awaited Data Act proposal, published today, has the potential to unleash the incredible value of the data economy. However, this will only be achieved if regulation acts as an enabler, rather than as a set of restraining obligations.

In general, the Act should focus on incentivising data sharing and building trust through clear guidelines. Imposing strict obligations on everybody, based on perceived issues in specific sectors – such as voice assistants – while we are still in the very early stage of developing Europe’s data economy, will hinder achieving our Digital Decade goals.

Positive aspects:

• Model non-binding contract terms will be useful for start-ups and scale-ups, who often lack experience, legal resources and capacity to handle contractual data sharing negotiations from scratch. But industry should be involved in drafting these models.
• Clarity on the use of data generated by connected devices, including how to access and share it, if done right, can help provide more certainty to the market.
• Setting rules for governments’ access to data is a good step to avoid regulatory fragmentation. But reasons for such access should be strictly defined and not open to abuse, and Members States should not be able to bypass them.

Key concerns:

• Some provisions will undermine companies’ contractual freedom and have the opposite effect than intended. To boost data uptake, it is important that data-sharing agreements remain voluntary and commercially viable.
• Instead, the EU should provide support and incentives for companies to share data, such as schemes allowing companies to closely cooperate without falling under antitrust legislation.
• Separate and targeted approaches to business-to-business and business-to-customer data access and sharing should be set out in the final text. The Act unfruitfully merges them.
• The current proposal will restrict international data transfers beyond the provisions set in the GDPR, and in a digital world this means directly hurting our global growth prospects. Europe could be €2 trillion better off and gain two million jobs by the end of the Digital Decade if we harness the power of international data transfers.

DIGITALEUROPE’s Director-General Cecilia Bonefeld-Dahl said:

“The data economy represents around 3% of Europe’s GDP. We want to double this by 2025, and therefore fully support the Commission’s ambition. When it comes to data sharing, many companies – especially smaller ones – are still finding their feet. They need incentives and support. Now is not the time to impose strict measures across the board that are designed to fix problems that simply don’t exist.

Also, we estimate that presently two-thirds of European SMEs transfer data over international borders, but the current proposal will restrict international data flows, which will seriously hamper their growth and competitiveness. 90% of future growth will come from outside Europe. This is a fact we need to face and work hard to make Europe a better place to do business instead of constantly imposing new regulation.”

DIGITALEUROPE speaks on behalf of the digitally transforming industries in Europe, representing 130 members and over 35,000 businesses. We look forward to cooperating with Member States and the European Parliament to ensure that this regulation translates into empowering policy measures for European businesses to effectively contribute to economic and societal growth.