The European Data Act has officially entered into force – ready to transform the way data from connected devices is shared and used.
It’s a key pillar of the European data strategy and it will make a big contribution to the Digital Decade's aim to ‘make Europe fit for the digital age’.
The initiative addresses some of the key challenges and opportunities brought about by data, with a focus on fair access, user rights, and the protection of personal data.
In this blog post, we’re covering everything you need to know about the Data Act, including the timelines, the purpose, the measures and the scope.
What are the timelines for the Data Act?
The Data Act entered into force on 11th January 2024, and it will become applicable in September 2025.
The new measures complement the Data Governance Act, which became applicable in September 2023 and was the first deliverable under the EU’s strategy for data.
While the Data Governance Act deals with how voluntary data sharing works, the Data Act explains who can benefit from data and when.
Together, the acts will make sure accessing data is easy and secure, boosting its use in key economic sectors, as well as areas of public interest.
What is the purpose of the Data Act?
The purpose of the Data Act is to make sure everyone gets a fair slice of the data pie by setting up clear rules for using data in the European data economy. And with the use of Internet of Things (IoT) devices continuing to boom, this is clearly more important than ever before.
Going forwards, connected products will have to be designed and manufactured in a way that empowers users – whether its businesses or consumers – to easily and safely access, use and share the generated data.
This could include data from a connected toothbrush, an occupancy sensor, or even a wind turbine.
What are the new measures brought about by the Data Act?
1. Increasing legal certainty
The Data Act will increase legal certainty for companies and consumers dealing with data generation, especially when it comes to IoT.
- There will be clearer rules on how data can be used, while keeping incentives for data holders to carry on investing in high-quality data generation
- There will be a more seamless transfer of valuable data between data holders and data users, while upholding its confidentiality
- The Commission will develop model contract clauses to help market participants draft and negotiate fair data sharing contracts
2. Stopping unfair contract terms
Another key aspect of the Data Act involves stopping contractual imbalances from getting in the way of equitable data sharing.
There will be rules in place to safeguard smaller companies from unfair contractual terms imposed by those with a stronger market position.
3. Increasing data sharing with the public sector
There will also be new measures that allow the public sector to access and use data held by the private sector – only when there are specific public interest purposes.
For example, public sector bodies will be able to ask for the data they need to tackle a public emergency quickly and securely.
4. Increasing data sharing with third parties
The Data Act will also allow users of connected products to share data with third parties.
This will enable aftermarket service providers – like repair services – to enhance their services, creating fairer competition with similar services provided by manufacturers.
It’s hoped that this will lower the cost of maintaining and repairing connected devices, and help to extend the lifespan of these products.
5. Progressing interoperability
Interoperability is a key part of the Act, which specifically states that ‘[a]n ambitious and innovation-inspiring regulatory approach to interoperability is needed to overcome vendor lock-in’.
There will be new requirements on cloud providers to allow customers to switch to different providers – reducing dependency and preventing excessive pricing.
6. Improving transparency
Before finalising a contract for the purchase, rent or lease of a connected product (or the provision of a related service), the data holder will need to provide specific information to the user in a format that’s easy to understand.
This will also include the relevant metadata that’s needed to interpret and use the data.
What is the scope of the Data Act?
The Data Act is a cross-sectoral piece of legislation, setting out guidelines that apply to all sectors, and any future legislation will need to align with its principles.
It will affect a range of stakeholders, and importantly, be relevant beyond the EU borders.
- Manufacturers and providers
Manufacturers of connected products and providers of related services placed on the EU market, regardless of where they are based.
- Users
Users of connected products or related services based in the EU.
- Data holders
Data holders, regardless of where they are based, that make data available to recipients in the EU.
- Data recipients
Data recipients in the EU to whom data from connected devices is made available.
- Cloud and edge providers
Companies providing data processing services to customers in the EU, regardless of where they are based.
- Other stakeholders
Participants in data spaces and vendors of applications using smart contracts, as well as persons whose trade, business or profession involves the deployment of smart contracts for others in the context of executing an agreement.
What does the Data Act mean for you?
Now that we've given an overview of the key measures that make up the Data Act, let’s dive into how this will actually impact you – either as a consumer or as a business.
- Consumers will be able to access their devices’ data and use it for aftermarket and value-added services
- Business and industrial players will have more data available and will benefit from a more competitive data market
- Aftermarket services providers will be able to offer more personalised services and compete on equal footing with comparable services offered by manufacturers
- Industrial data will be combined in different ways to develop completely new digital services
Overall, access to data from connected devices will be more fair, transparent, and flexible – seems like a win-win-win to us.
What will be the outcome of the Data Act?
The European Commission estimates that 80% of industrial data is unused right now – either because it’s not optimized for sharing, or because companies struggle to see its inherent value.
There’s a lot of potential for innovation being left on the table, and this is exactly what the Data Act is setting out to change.
It’s a legislative shift that will have a big impact on every industry – standarizing data access and making it easier for everyone to get their hands on the information they need.
Want to find out how Metrikus is making building data more accessible and actionable? Schedule a call with one of our team.
