How will the EU Data Law change the way data is used and shared?

Some time ago, we discussed what impact the EU’s Data Act will have on the industry after it is officially passed? , today we continue to take a look at How will the EU's "Data Law" change the way data is used and shared?

Introduction to the "Data Act"

On February 23, 2022, the European Commission officially released the "Draft Data Act" (hereinafter referred to as the "Data Act"), which aims to Unlocking the economic and social potential of data and technology in line with EU rules and values. The bill puts forward new requirements around data sharing, public agency access, international data transfer, cloud switching and interoperability, etc., and will have a significant potential impact on the global digital economy and data governance.

On November 9, 2023, the European Parliament voted to pass the "Data Law", which will take effect on January 11, 2024, and will become applicable in September 2025.

The Data Law will apply to providers of digital services and connected products (Internet of Things) as well as related data users in the EU. Compared with other regulations in the EU digital field, the "Data Law" focuses more on non-personal data or data that does not contain any personally identifiable information (such as vehicle performance, industrial equipment operation data, farm temperature and humidity, etc.), following the " The General Data Protection Regulation (GDPR) addresses rights and obligations regarding personal data and complements the Data Governance Act (DGA) which focuses on the use of data in the public sector and is therefore also known as “the last horizontal component under the EU Data Strategy” .

#In the future, the EU hopes to change the way data is shared and used on connected devices through this bill. From the EU’s perspective, the bill addresses some of the key challenges and opportunities posed by data, focusing on fair access, user rights and personal data protection. The EU considers this an important pillar of the European data strategy and will make a significant contribution to the goal of "adapting Europe to the digital age".

The Data Law makes up for the bias of the Data Governance Act and provides broader rules that apply to all data based on the EU’s General Data Protection Regulation (GDPR). The Data Governance Act deals with how voluntary data sharing works, while the Data Act explains who can benefit from data and when. Together, these bills will ensure the convenience and security of data access and promote the application of data in key economic sectors and areas of public interest.

What is the purpose of the "Data Law"?

The purpose of the Data Law is to set clear rules for data use to ensure everyone has fair access to data. This becomes even more important as IoT devices become more common.

Looking to the future, connected products must be designed and manufactured in a way that allows users, whether businesses or consumers, to easily and securely access, use and share the data generated. This could include data from connected toothbrushes, occupancy sensors or even wind turbines. This is especially critical for overseas smart home companies.

However, some observers stated that in addition to the above purposes, the EU also has other strategic intentions to consider. For example, Europe's comparative advantages can be leveraged to unleash the value of non-personal data and boost the digital economy. Because, compared with the United States and China, the EU's comparative advantage lies in its rich high-end manufacturing and industrial data, and industrial digital transformation is also considered to be the key to the future development of Europe's digital economy.

In the context of the accelerating development of the global digital economy and the constant digital competition between major powers, the EU's use of releasing the value of its industrial data in promoting innovation and digital transformation is an important way to achieve "overtaking around the corner" in digital development. "an important path.

What new measures does the Data Bill bring?

1. Increased legal certainty

The Data Law will increase legal certainty for businesses and consumers dealing with the data generated, particularly in relation to the Internet of Things.

• There will be clearer rules on how data is used, while data holders are incentivized to continue investing in high-quality data generation
• Between data holders and data users Valuable data will be transferred more seamlessly while maintaining its confidentiality
• The European Commission will develop model contract clauses to help market participants draft and negotiate fair data sharing contracts

2. Eliminate unfair contract terms

Another key aspect of the Data Act is to prevent imbalances in contracts from preventing fair data sharing.

In addition, the EU will develop rules to protect small companies from unfair contract terms imposed by companies with a stronger market position.

3. Increased data sharing with the public sector

The Data Act will also introduce new measures to allow the public sector to access and use data held by the private sector— —But only for specific public interest purposes.

For example, public sector agencies will be able to request the data they need to respond quickly and securely to public emergencies.

4. Increase data sharing with third parties

The Data Law also allows users of connected products to share data with third parties.

This will enable after-sales service providers, such as repair services, to enhance their services and compete more fairly with similar services provided by manufacturers.

The hope is that this will reduce the cost of maintaining and repairing connected equipment and help extend the life of these products.

5. Improving interoperability

Interoperability is a key part of the bill, which clearly states that "ambitious interoperability regulation that inspires innovation is needed Methods to Overcome Vendor Lock-in”.

There will be new requirements for cloud providers, allowing customers to switch to different providers - reducing dependency and preventing overpricing.

6. Increase transparency

Before finalizing a contract to purchase, lease or hire a connected product (or provide related services), data holders need to format to provide specific information to users.

This will also include relevant metadata needed to interpret and use the data.

What is the scope of the “Data Law”?

The Data Act is a cross-sectoral piece of legislation that sets out guidance that applies to all sectors, and any future legislation needs to be consistent with its principles.

It will impact a range of stakeholders and, importantly, have implications beyond EU borders.

• Manufacturers and Suppliers

Manufacturers and related service providers selling connected products on the EU market, regardless of where they are located .

• Users

Users of connected products or related services located in the European Union.

• Data Holder

The data holder, wherever located, provides the data to recipients within the European Union.

• Data Recipients

Data recipients within the EU where data from connected devices are available.

• Cloud and Edge Providers

Companies that provide data processing services to EU customers, regardless of where they are located.

• Other Stakeholders

Participants in the data space and application providers using smart contracts, and their trade, business or profession Involves people who deploy smart contracts for others in the context of executing protocols.

What does the "Data Law" mean to users?

Above, we have outlined the key measures of the Data Law, now we take a deeper look at how these measures will have an impact – both as a consumer and as a business.

• Consumers will be able to access data from their devices and use it for after-market and value-added services
• Commercial and industrial players will have more data available and will benefit from A more competitive data market
• After-sales service providers will be able to provide more personalized services and compete equally with similar services provided by manufacturers
• Industrial data will be combined in different ways , developing new digital services

Overall, access to data from connected devices will be more fair, transparent and flexible – it seems like a win-win-win situation to us.

What results will the "Data Law" bring?

The European Commission estimates that 80% of industrial data currently goes unused – either because the data is not optimized for sharing or because companies struggle to see its intrinsic value. There is a lot of potential for innovation that has yet to be tapped, and that’s exactly what the Data Bill wants to change.

The EU believes this is a legislative shift that will have a significant impact on every industry - standardizing data access and making it easier for everyone to get the information they need.

What is the expected impact of the Data Law?

From the perspective of the bill itself and the EU's overall strategic intentions, the "Data Law" is an ambitious plan to build Europe into the most competitive data economy. However, many people believe that under the influence of GDPR and the overall data strategy, the EU's policies may have a backlash effect, especially when its trading partners also increase the level of restrictions on cross-border data flows accordingly.

In addition, the European Union’s repeated reviews and penalties on U.S. technology giants in recent years seem to be intended to weaken the influence of U.S. technology giants, so friction between the United States and Europe may intensify. Tencent Research Institute believes that data privacy and cross-border flow issues are still the main friction points between the United States and Europe. A few days ago, 30 US lawmakers jointly sent a letter to US President Biden, urging the EU to amend the text of the "Digital Market Act" to avoid Unfairly targeting American businesses. Under the premise that the "Privacy Shield Agreement" has expired and there is no alternative, the "Data Law" essentially denies the free flow of data between the United States and Europe.

Of course, the birth of the "Data Law" also provides a reference for data governance in other regions around the world. For example, the legislative ideas of the GDPR have been borrowed by many countries, and the "Data Law" may also follow in its footsteps, which will not only affect the data protection and data utilization methods of global enterprises, but may also form linkages with other countries' domestic regulations and transform them into similar laws and regulations.

In short, the Data Law seems to have a greater impact on U.S. technology giants, but it is also a challenge for Chinese overseas companies, especially the restrictions on international data transmission in the Data Law. It will have an impact on the business expansion of Chinese overseas companies in Europe.

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