Data Act proposals: potentially adverse effects on consumers and innovation in the EU
On 23 February 2022, the European Commission published its draft Data Act, a proposal for a regulation of access to and use of data, in particular data generated by IoT devices and related services.
The Data Act is primarily intended to unlock the value of data by increasing the extent of sharing and promoting its use as an economic input. Importantly, this aim is to be achieved while maintaining incentives to invest in the raw data generation that lies at the root of the data economy.
More specifically, the Data Act aims to improve competition and fairness in data markets, while ensuring that users’ data privacy is maintained.
The Data Act has the potential to achieve significant benefits, for both users of devices and for society as a whole. In particular the harmonised rules on data access have the potential to:
- unlock new data-based business opportunities;
- give users of products more control over data;
- improve public services and policies;
- facilitate cloud switching for users.
- create a more efficiently connected ecosystem around the IoT devices
However, previous examples of policy making has shown that the extent to which benefits are realised is highly dependent on the way regulation is defined and implemented.
First, there are questions of scope and applicability of the new rules. That is to say, which firms and services are covered by the rules and what—if any—exceptions and exemptions may apply?
Second, there are questions around the design and implementation of regulatory compliance measures. While some of the new regulations provide unambiguous “do’s and don’ts” for the businesses they cover, others include elements of flexibility and interpretation. This is particularly the case where regulations are based on economic principles—such as the Fair, Reasonable and Non-Discriminatory (FRAND) terms—which require case-by-case interpretation. giving rise to potential disputes.
In this report we explore the some of the potential adverse effects on consumers and innovation of the Data Act in its current form. As policymakers continue to debate and amend the Data Act, we set out a number of key principles may help to ensure that the Data Act achieves its full potential.