EU seeks to ‘seize the opportunity’ of data economy

Upcoming EU legislation that aims to put users and providers on an equal footing regarding data access is expected to generate billions of euros of additional GDP for Europe, according to European Commission estimates. 

The Data Act is a legislative proposal to open a market for data generated by connected devices. Following the adoption of the Data Governance Act, it is the second major building block of the European data strategy, as it defines a governance framework for industrial data trading.

We are today at a pivotal time in the data economy. And we really need to seize this opportunity to boost Europe’s leadership position in this regard,” António Biason, a legal and policy officer at the European Commission’s digital policy department (DG CNECT), told at a EURACTIV event on 13 October. 

Data is and will increasingly be fundamental for the European digital economy, which is why data collaboration across Europe’s industries will be essential. 

By 2030, the EU data economy will cross the one trillion euro threshold. And it has been growing annually for a while now, accounting for almost 3.6% of the European Union GDP. 

“That’s why the Data Act is so critical. It’s going to help boost the data economy by creating a clear framework for the internal market,” Kir Nuthi, a senior policy analyst at the Center for Data Innovation, told the same event. 

The Commission estimated earlier this year that the new rules could generate 270 billion euros in additional GDP by 2028

Boosting the data economy

With the emergence of the Internet of Things (IoT), valuable data is generated by the ever-more ubiquitous use of connected devices. However, it is not always clear who can use that data, how and for what purposes.

“So the Data Act does precisely that. It aims at clarifying who can use what data and under which conditions,” António Biason explained. 

The legislation also deals with improving the cloud switching ability, making more data available for the public sector and data interoperability in the EU.  

However, Biason also argued that the main point of the file is not only to improve competition and the quality of IoT products but also to give digitalisation and the data-driven economy a push. 

By some estimates, around 80% of industrial data is not used, representing a vast untapped potential resource.

Internet of Things market

In focus are the products that generate or collect information about their use or the environment. However, this is not set in stone, as an article foresees the possibility of reviewing these categories.

The scope includes both raw and prepared form data, which is data cleaned and transformed prior to processing and analysis. Out of scope is derived or inferred data, which results from software or hardware processes. 

The goal is for the Data Act to lead to more transparency, which could be beneficial for Europe’s competitiveness. If a customer buying a product knows exactly what to expect, this could be an argument for buying a product rather than a product of comparable quality without such information. 

Thomas Mann, a chief information security officer at K-Businesscom AG, a digital consultancy, believes the legislation should be seen as an instrument to get more advantage on the international market while also protecting the manufacturers’ intellectual property rights. 

Level-playing field 

The Data Act is also about achieving a level playing field, the Commission argues.

“We want to ensure that those who lack data, who are data poor, actually get data,” Biason said. Data should not keep going to those already rich in data. 

As data will be the infrastructure of the future data economy, “we really have to ensure that more players in the data market actually get this data,” Biason added. 

The debate about the exemption of SMEs was also picked up again. Previously, Conservative MEP and rapporteur Pilar del Castillo Vera included a broader exemption for the number of companies concerned by the data-sharing obligations that the regulation will introduce. 

Del Castillo pointed to a risk of overburdening small and medium-sized enterprises “by imposing further design obligations in relation to the products they design or manufacture, or the related services they might provide”.

Therefore, the rapporteur proposed extending the exemption from data-sharing obligations towards users and the public sector from micro and small companies to include medium-sized enterprises.

The deadline for tabling amendments to the draft report is 28 October in the industry committee, which is leading the file in the European Parliament. 

[Edited by Zoran Radosavljevic]