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DIGITAL EUROPE

Data Act

The Data Act Regulation shall apply from 12 September 2025 (see art. 50 for other deadlines)
The EU Data Act is part of the broader EU Data Strategy, which aims to create a single market for data within the EU. The Act is expected to be a key piece of legislation that will remove barriers to the free flow of data and facilitate access to data in a secure and trusted manner.

One of the main objectives of the Data Act is to promote data sharing across borders and between sectors. To achieve this, the Act proposes the development of common European data spaces in strategic sectors such as health, energy, and mobility. These data spaces would facilitate the exchange of data and ensure that data is accessible to those who need it while protecting privacy and security.

The Act would also establish clear rules for the use of data, including rules for data protection and data ownership. It would encourage the development of data intermediaries that could help connect data users with data providers while ensuring that data is used in a responsible and ethical manner.
While the Data Act clarifies who can create value from data and under which conditions, Data Governance Regulation (DGA) creates the processes and structures to facilitate data. The DGA also includes provisions for the enforcement of the new rules, including the establishment of new mechanisms for cooperation between EU member states and the development of sanctions for non-compliance.
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​The Data Act places obligations on manufacturers and service providers to allow users, whether companies or individuals, to access and reuse data generated by their products or services. This encompasses a wide range of products from coffee machines to wind turbines. Additionally, it permits users to share this data with third parties, such as sharing vehicle data with mechanics or insurance companies.

Key Objectives of the Data Act
  1. Fair Value Allocation from Data: Ensuring fairness in how data value is distributed among digital environment actors.
  2. Stimulating Competitive Data Market: Encouraging competition in the data market.
  3. Data-Driven Innovation: Opening opportunities for innovation based on data.
  4. Data Accessibility: Making data more accessible to all.

The Act also aims to facilitate switching between data processing service providers and establishes safeguards against unlawful data transfers. It promotes the development of interoperability standards for data reuse across sectors.

Main Elements of the Data Act
  • Scope: Users of connected devices will have access to data generated by their use, with a focus on the functionalities of the data rather than the products.
  • Protection of Trade Secrets: Ensures adequate protection of trade secrets and intellectual property, with mechanisms for dispute resolution.
  • Fair Data Sharing and Compensation: Addresses contractual imbalances in data sharing contracts and offers guidance on fair compensation for businesses sharing data.
  • Public Sector Data Access: Allows public sector bodies to access and use private sector data in exceptional circumstances, like natural disasters.
  • Consumer Benefits: Facilitates easier migration between cloud providers and introduces interoperability standards for data sharing.

Governance Model and Next Steps

The Regulation allows member states flexibility in implementation and enforcement, with a coordinating authority in each state acting as a 'data coordinator'.

Summary

  • The Data Act aims to create a single market for data within the EU by removing barriers to the free flow of data and facilitating access to data in a secure and trusted manner.
  • It proposes measures to increase legal certainty for companies and consumers generating data, making it easier to transfer data between service providers and encouraging more actors to participate in the data economy.
  • The Act also includes measures to prevent abuse of contractual imbalances that hinder fair data sharing and protect SMEs against unfair contractual terms imposed by parties with a significantly stronger market position.
  • Public sector bodies will be able to access and use data held by the private sector that is necessary for specific public interest purposes, such as responding quickly and securely to a public emergency while minimizing the burden on businesses.
  • The Act includes new rules for customers to effectively switch between different providers of data-processing services to unlock the EU cloud market and promote data interoperability.
  • It clarifies the role of the sui generis database right in relation to databases resulting from data generated or obtained by IoT devices to ensure the balance between the interests of data holders and users is in line with the broader objectives of the EU data policy.

Benefits

  • The Data Act is expected to drive innovation and job creation in the EU, allowing the EU to lead the second wave of innovation based on data. 
  • Users of connected products will have more control over the data they generate, allowing them to enjoy the benefits of the digitization of products. Aftermarket service providers will be able to compete on an equal footing with manufacturers, potentially leading to lower prices and longer product lifespans. 
  • Availability of data about the functioning of industrial equipment will allow for factory shop-floor optimisation: factories, farms and construction companies will be able to optimise operational cycles, production lines and supply chain management, including based on machine learning.
  • SMEs will have more opportunities to compete and innovate based on the data they generate, and the ability to transfer data to service providers will encourage more actors to participate in the data economy. 

How does the Data Act work?

The Data Act is a legislative initiative aimed at enhancing data availability for the benefit of businesses, individuals, and public administrations. It includes various measures designed to achieve this goal:

1. Enhancing Legal Certainty: The Data Act seeks to provide greater legal clarity for companies and consumers regarding the use of data. It outlines who can use specific data and under what conditions. It also encourages manufacturers to continue investing in high-quality data generation. This clarity facilitates data transfer between service providers and encourages participation in the data economy by entities of all sizes.

2. Preventing Contractual Imbalances: The act addresses unfair contractual terms that hinder equitable data sharing. Small and medium-sized enterprises (SMEs) are protected from unfair terms imposed by more dominant market players. The European Commission will develop model contract clauses to assist market participants in drafting and negotiating fair data-sharing contracts.

3. Public Sector Data Access: The Data Act provides mechanisms for public sector entities to access and utilize data held by private sector organizations when it serves specific public interest purposes. This access is particularly important for responding to public emergencies while minimizing the burden on businesses.

4. Framework for Data-Processing Service Providers: New rules are established to create a suitable framework for customers to switch between different data-processing service providers effectively. These rules aim to unlock the European cloud market and contribute to overall data interoperability.

5. Review of the Database Directive: The Data Act also reviews certain aspects of the Database Directive. Notably, it clarifies the role of the sui generis database right, which protects the content of certain databases. This clarification extends to databases resulting from data generated or obtained by Internet of Things (IoT) devices. The objective is to ensure that the balance between data holders and users aligns with the broader goals of the EU data policy.

The Data Act represents a comprehensive effort to regulate data usage, sharing, and access while fostering a fair and competitive data economy within the European Union.