Understanding the EU Data Act
Understanding the EU Data Act

Understanding the EU Data Act

Kaamel LabJanuary 25, 2024

Legislative Background: In today's world, where digital technology is everywhere, data has become as important as money was in the past. It's involved in almost every part of our lives. Technologies that use data are changing every sector of the economy, and as more products are connected to the internet, the amount of data and its value are growing fast.
However, there are many problems in the way data is currently shared. For example, those who own data aren't always keen to share it, the rules about who owns data and who can use it aren't always clear, and there are issues with managing data properly. These problems make it hard to use data in the best way possible. Even though there's a lot of data out there, it's not being used effectively, and often only a few big companies are benefiting from it.
On November 27, 2023, the European Union Council officially passed the Regulation on Harmonised Rules on Fair Access to and Use of Data (Data Act), which came into effect on January 11, 2024. As a key pillar of the EU's data strategy, the Data Act significantly contributes to the EU's digital transformation goals, providing a regulatory framework for data flow and usage.
Legislative Significance: The Data Act builds on the Data Governance Act from September 2023. While the earlier act set up a system for sharing data, the Data Act goes a step further. It clearly says who can use data and under what conditions. It sets out clear rules for businesses and people about how to access, get, and share data. This helps everyone in the EU to use data fairly and properly. It also makes sure that users of data processing services are treated equally with the service providers. The Data Act and the Data Governance Act together make it easier and safer to get data in the EU, which helps the economy and society.
A key part of the Data Act is about products connected to the internet, like those in the Internet of Things (IoT). These products are different from traditional ones because they don't just have physical parts; the data they create during use is also an important part of them. The Data Act affects many businesses involved in making and providing services for these connected products, like smart home devices, cars, industrial machinery, and more.
Scope of Application: Who It Applies To: According to the Data Act:
  1. Manufacturers and service providers selling in the EU market, and the users of their products and services.
  1. Those who hold data and provide it to others in the EU.
  1. Those who receive data in the EU.
  1. Public sector bodies in the EU that need data for public interest tasks, and the data holders who give them this data.
  1. Service providers who offer data processing services to clients in the EU.
Mainly, the Data Act focuses on those who hold data. This includes not just people or companies that own data but also those who provide services related to processing this data.
What It Applies To: The Data Act covers more than just personal data (like GDPR does); it includes all sorts of data. Its main goal is to help connected products grow by making the most of the data they create and use. So, it looks at data from these products, dividing it into "product data" and "service-related data."
Where It Applies: The Data Act isn't just for the EU. It applies to any business involved in the EU market, even if they're based outside of it. But, the rules for sharing data mostly apply to users within the EU.
Key Provisions: Making Data Easier to Access and Use: Before the Data Act, only manufacturers could often get the data from connected products, limiting options for consumers. The Data Act changes this by requiring businesses to share product and service data. This opens up more opportunities and makes the data market more active.
  • Users should be able to easily access data from products and get any necessary metadata.
  • Data holders must share data with third parties if a user asks for it.
  • Data should be provided in a way that's clear, structured, and easy for machines to read.
Protecting Secrets and Preventing Illegal Data Use: The Data Act also focuses on keeping trade secrets safe while sharing data. Data holders need to identify any data that contains secrets and agree on how to keep this data safe. If they can't agree, they can refuse to share the data.
Encouraging Small Businesses to Use Data: The Data Act aims to make it easier for small and medium-sized enterprises (SMEs) to get and use data. It tries to make sure that these businesses aren't overwhelmed by the requirements of data sharing.
Limiting Big Companies' Control Over Data: The Data Act tries to balance the power in the data market by limiting how much big companies (called "gatekeepers") can benefit from data sharing. These gatekeepers are not allowed to get data shared under the Data Act, either directly or indirectly.
Conclusion: In a world full of data, the Data Act helps make sure this valuable resource is used well and benefits more than just a few big companies. It sets clear rules for sharing and using data, which is important for businesses in the EU. Companies need to follow these rules and make sure they're sharing data in a way that's fair and respects everyone's rights.
More resources on the Data Act: