The Data Act is a breaker of (competitive) chains

Today’s proposal for a draft Data Act delivers a long overdue fundamental reallocation of economic interests in the data economy. If adopted, it would change the paradigm through the introduction of clear and unequivocal economic rights for users of connected products over the data they create.

By doing so, the Data Act proposal addresses a fundamental shortcoming of EU law. So far, non-personal data has been considered merely an invisible externality of other processes, which ignores the economic reality that access to data is a key source of profit and of market power. Terabytes of machine-generated data, collected daily in Europe’s factories, power stations or transport routes, have been treated as if they were worthless and irrelevant to the structure of the economy.

Well, of course they are not! In a world of interconnected objects, Industry 4.0 and artificial intelligence, access to data is THE defining competitive factor. Any innovator or market entrant requires access to data. Those who control this access are the gatekeepers to the data economy of each connected object. Where there are no rules, the strongest party prevails. Often – but not always – this party is the producer of a connected device for whom the exclusive control over data is at the same time a means to keep out competitors and a free input into the development of new products.

I therefore explicitly welcome that the Data Act proposal aims at breaking this recurring source of market concentration by making the economic value of data visible and empowering the user to participate in it. However, I am concerned that the users’ rights over the data are not spelt out clearly enough. It should be clarified that users can download, process and monetize data that is collected by the product they own. Data holders’ rights to access and use data should be limited to what is necessary to ensure the functionality and safety of the connected object.

Only then, would individuals, small businesses or large multinationals, who own a connected object be able to participate in the economic value of the data, by sharing, licencing or selling the data created by the object. The Data Act should create the legal clarity and economic incentive that I believe is necessary to convince consumers and businesses on a large scale to share data with those who can use it to train algorithms or perform complex analyses.

As negotiator for my group, the Greens / EFA,I explicitly welcome the horizontal nature of this regulation. The industry groups, which argue that economic imbalances are sector-specific, are just trying to preserve their market power. I will therefore focus strongly on a broad scope of application of the Data Act.

In addition, I will try to ensure with Parliament that strong provisions to enforce data portability in cloud computing and to counter technical or commercial lock-in tactics from providers of cloud services.

The Commission could have been more ambitious to address the imbalances of all the data that is already stored on the servers of dominant actors. I will fight for stronger provisions that force dominant players in concentrated markets to share data they have already collected in the past with competitors or market entrants.

Overall, I believe the Commission has succeeded in delivering an excellent Data Act proposal, which is a good basis for becoming a game changer regulation for the European economy.

We will keep you up to date as this file progresses.