EU draft Data Act: Users set to get rights to see IoT feeds

In proposals aimed at IoT and machine data, the European Commission has put forward the Data Act, which promises to force manufacturers to share streams of after-sale data with third-party tech firms.

In a move set to shake up the market for digital services based around products, the EU’s executive branch said it wanted to give users of connected devices access to the data generated by them.

Consumers and other users would then also have the right to ensure manufacturers share such data with third parties to provide aftermarket or other data-driven services.

Manufacturers would have their costs covered and be protected from competitors accessing data, according to the proposed legislation. Both of these caveats seem aimed at addressing concerns of private firms since the EU first presented the data strategy in early 2020 (see here).

By May 2021, when the commission published its “impact assessment” for the Data Act, companies that generate what they consider to be “proprietorial” data were worried about “undermining their investments and potentially exposing trade secrets,” as one Brussels-based lawyer put it.

Bird & Bird LLP’s Francine Cunningham added: “There will also be concerns that the Data Act may take away certain privileged positions of some companies, in particular original equipment manufacturers (OEMs) of internet-connected objects, and thereby threaten investments into data-generating objects.”

At a press conference, commission executive vice president Margrethe Vestager said: “The Data Act defines who can use what data and under what conditions. We want to ensure greater fairness in the allocation of the value created by data. [People are] buying more products that generate data —from smartwatches to connected cars. Currently, it’s mainly the manufacturers of these products who hold and use the data.

“To empower consumers, we want to change this by building data portability. First, consumers will have the right to access all of this data free of charge, and in real-time. Secondly, [they] will have the rights to oblige the manufacturer to share this data with another company: a company that [they] have chosen to provide additional services [such as] maintenance and repairs. This gives [people] greater control over [their] data. It also boosts competition by allowing more companies to offer their services to [consumers].”

The proposals also aim to give SMEs more power to help prevent abuse of contractual imbalances in data sharing contracts and shield them from unfair contractual terms imposed by a party with a significantly stronger bargaining position.

In light of the pandemic, public-sector bodies will be given access to data held by the private sector in exceptional circumstances, “particularly in case of a public emergency, such as floods and wildfires, or to implement a legal mandate if data are not otherwise available,” the commission said.

Lastly, the Act promises to make it easier to move data between cloud providers, both for businesses and consumers.

Vestager said the Act aimed “to remove commercial technical contractual obstacles that still prevent customers from switching between cloud services.