Yesterday, on 8 March, the Swedish Council Presidency circulated its 6th, and supposedly last, draft version of the Data Act. This piece of legislation, unveiled by the European Commission in February 2022, aims at ensuring fairness in the allocation of value across the data economy. Its ambition is to unlock the potential of the data economy by removing barriers to access data and encourage data sharing across Europe. This would allow for businesses to better leverage the data they process and more generally encourage innovation and growth. However, Ecommerce Europe strongly believes that imposing a strict regulatory framework could have the opposite effect and thereby hinder innovation that would be best triggered through best practices from the industry. As the European Parliament and Council of Ministers are finalizing their positions on the file, Ecommerce Europe welcomes the Council’s latest additions to the text that further strengthen the protection of trade secrets. Nonetheless, concerns remain about other provisions, such as Article 27 on international data transfers.
Strengthened provisions on trade secrets
The legislation introduces a right for users of connected devices to request access to the data they generate when using those devices. Ecommerce Europe welcomes the overall ambition of the legislation to encourage data-sharing and remove barriers to access data, nevertheless, the lack of clarity on the scope of this obligation could represent a serious threat to the protection of trade-secrets. Responding to this risk, the last version of the Council’s draft text introduced an exception to the principle stating that exceptionally, data holders (the organisations controlling the data) can refuse to share data in case they can prove they will highly likely suffer economic harm form it. The latest version of the text, issued on 8 March, goes further and broadened the scope of the exception to any trade secret. Ecommerce Europe strongly welcomes these new developments as the Data Act should allow for increased data-sharing while ensuring that trade secrets and other business sensitive information remain safe and sound.
Uncertainty on international data transfers remains
Cross-border data flux and collaboration with international partners is a crucial aspect for businesses taking part in the data economy and should therefore be encouraged under the new law. Article 27 of the Data Act, which focuses on third country governments’ access to non-personal data and international transfers, has unfortunately not been significantly modified during the negotiations. Under this article, cloud service providers should actively take “all reasonable technical, legal and organizational measures” to prevent international transfers or government access to non-personal data that would be inconsistent with EU or national law. Ecommerce Europe is concerned about the technical feasibility, and cost that such an obligation will have on businesses, especially smaller ones. Such a provision will certainly hinder international data transfers by creating a very restrictive legal framework to international non-personal data transfers, and might be even more restrictive than the General Data Protection Regulation (GDPR), the legal framework already in place for the protection of personal data. Although the Council and the European Parliament’s negotiations on the Data Act is approaching an end, Ecommerce Europe strongly advises policymakers to take into account the risk that a lack of consistency between the Data Act and GDPR would have on the legal certainty of businesses relying on international data transfers.
What’s next for the Data Act?
The rapporteur Pilar del Castillo Vera (EPP, Spain) is positive about reaching an agreement on the European Parliament position during the Plenary session scheduled for next week on 14 March. At the Council of Ministers, the 6th version of the text is expected to be adopted as the Council’s General Approach by the Committee of Permanent Representatives (COREPER) on 22 March. The inter-institutional negotiations between the European Parliament, European Commission and the Council of Ministers, better known as trialogues, are expected to take place at the end of March at the earliest.
If you would like to receive more information on this topic and on upcoming developments, please reach out to info@ecommerce-europe.eu.
