On 27 November, the Council of the European Union (the Council) took a significant step towards making the European Union a global leader in the data-driven economy with the formal adoption of the new Data Act.

Objectives of the law

The Data Act sets out to achieve several key objectives, including:

  • Fair Value Allocation – ensuring fair distribution of value from data in the digital sphere.
  • Competitive Data Market – stimulating innovation and growth through a competitive data market.
  • Data Accessibility – making data more accessible across economic sectors to drive innovation.
  • Interoperability – facilitating easy switching between data service providers and establishing interoperability standards.

The Data Act will also empower users by reinforcing the right to data portability, allowing access to data generated by connected devices and enabling sharing with third parties.

Scope of the law

The Data Act prioritises safeguarding intellectual property and trade secrets, ensuring robust protection against potential misuse. Additionally, it introduces measures to prevent contractual imbalances in data sharing agreements, shielding companies from unfair terms. In exceptional circumstances, the Data Act enables public sector bodies, the Commission, and EU entities to access and utilise private sector data, striking a balance between privacy and the broader public interest.

Consumers stand to gain from the new law, with increased flexibility to move between cloud providers, safeguards against unlawful data transfers, and the expectation of more efficient after-sale services for certain devices.

Governance model

The Data Act preserves flexibility at the Member State level for implementation and enforcement. A coordinating authority, labelled 'data coordinator,' will serve as a single point of contact in applicable Member States.

Background

This follows the Data Governance Act and is the second key initiative from the Commission's 2020 European strategy for data. While the Data Governance Act focuses on facilitating data sharing, the Data Act clarifies value creation from data, contributing to a fair and innovative data-driven economy and guiding the EU's digital transformation by 2030.

The regulation will be published in the EU's official journal in the coming weeks and come into force 20 months thereafter, with specific provisions for new products (Article 3(1)) applying after 32 months.

The Council's press release can be found here and the Data Act as adopted can be accessed here.

The European Parliament's press release can be found here.

Our previous blog post on the Data Act can be found here.

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