European Union lawmakers are working on a new data act that would cover consumer and corporate data. It is aimed at curbing the power of US-based tech giants, but German companies including SAP and Siemens warn it will put trade secrets at risk and harm their ability to compete globally.
The European Data Act was first proposed last year as a way to tackle ownership and control of data generated by the use of a product or service. It comes as the amount of data created globally will have increased to 221 zettabytes by 2026 from 33 zettabytes in 2018. A zettabyte is a trillion gigabytes, or roughly 500 billion HD movies.
This data has potential to drive innovation and economic growth, especially if combined with artificial intelligence. But EU commission legislators say this isn’t being capitalised on as too many companies keep it secret, leading to it being largely unused. the EU Data Act aims to “free up” the data and make it available to consumers, businesses and the public sector.
The proposals apply to devices, machines and software that gathers data related to their performance and environment. This includes IoT and smart home devices, as well as connected vehicles and smart manufacturing systems.
SAP and Siemens argue the law is too broad and could cover devices that do not generate data, such as light bulbs, as well as force them to share data that could give competitors outside of the EU – and not bound by the act to share similar information – an unfair advantage.
EU Data Act ‘undermining competitiveness’
The two companies wrote a joint letter to EU Commission president Ursula von der Leyen and antitrust chief Margrethe Vestager to warn that as drafted the act “risks undermining European competitiveness by mandating data sharing”.
It goes on to say it would require the sharing of core know-how and design data with not only the user, but also third parties. “Effectively, this could mean that EU companies will have to disclose data to third-country competitors, notably those not operating in Europe and against which the Data Act’s safeguards would be ineffective,” they explained.
Other signatories of the letter, hoping to have the legislation changed before the act becomes law, include German medical technology company Brainlab, software company DATEV and the European lobbying group Digital Europe.
They want new safeguards that would allow the refusal of requests to share data where trade secrets, health and safety or cybersecurity are at risk. They also want to limit the scope of devices covered by the legislation.
In a response to questions about the letter, the EU Commission said while it understood the importance of trade secrets, companies shouldn’t use them as a pretext. Commission spokesperson Johannes Bahrke told a news conference reported on by Reuters that the Act isn’t trying to change European or national law on trade secrets, but that it’s important they’re not used as an excuse for not sharing data.
“We have to find the balance there. And that’s exactly what we’re trying to do with the proposal on the Data Act. There are safeguards, so contractual and technical protections laid out in the Data Act,” he said.