“Data is an essential raw material”. With those words, European Commissioner Margrethe Vestager wants to unleash a revolution in the technology sector. If it were up to her, in the future all the data that smart machines produce will be accessible to the owners of those devices. Whether we are talking about smartphones, cars, agricultural machines or coffee machines: every consumer or entrepreneur will soon be able to exploit their own data. And in doing so, they can look for the best or cheapest provider of services based on that data.
The new bill that the European Commission is publicizing today is called the Data Act. It is intended to end a debate that has been going on since smart devices have existed. Who owns the data that the machines produce? Due to the legal uncertainties surrounding ownership, according to the European Commission, by no means all data that is available is actually made use of. In Vestager’s words, “Our data strategy is entirely about being able to use such data in a productive way.”
Consumers have control
The new European law makes it clear once and for all: the control of data is in the hands of the owners of the devices, not the manufacturer. Consumers gain the right to access their data in real time and at no extra cost. Additionally, manufacturers will be required to share the data with another company at the request of the consumer. Whether the data is needed for maintenance, repair or offering additional services, the control of what happens to the data now rests with the consumer.
The European Commission expects a new market to emerge teeming with companies offering data services. “It will boost competition and allow more companies to offer services,” Vestager states. Incidentally, the politicians in Brussels want to prevent Big Tech from immediately hijacking this new data market. The proposal contains guarantees that it is precisely SMEs that stand to benefit from these new opportunities.
The cloud market is also heading for a shake-up
Not only will there be new rules on access to data, but the market for cloud services is also going to be overhauled. Users must be able to switch providers more easily. “The proposal aims to remove commercial, technical and contractual obstacles that prevent users from switching cloud providers,” Vestager goes on to say.
It is now clear that the rules of the new Data Act on cloud services do not apply on cloud services companies offer within their own ecosystem. So companies like Apple can continue to offer cloud functions through its own iCloud system. But companies mod have to make ensure that when customers want to switch to a different provider, it is possible the cloud functionality can be transported as well.
In order to facilitate the switching of providers, the European Union wants to compel cloud storage providers to agree amongst themselves on standards for data storage.
Verstager: “Sharing data is often impossible on account of technical constraints. These can stem from a lack of standardized formats. Put simply, it’s difficult to communicate if we don’t speak the same language”. The vision is that by doing this, not only will consumer rights be bolstered, but also more competition will be generated in a sector that is becoming increasingly more important to companies.
Governments will have easier access
Part of the proposal also involves giving governments easier access to non-personal data from private parties. According to the European Commission, this is in the general interest in the event of exceptional emergencies such as floods or forest fires.
The Commission cites the corona pandemic as a case in point. To be able to track the spread of the virus through Europe more effectively, it was “essential” to be able to analyze anonymized data from cell phone providers. Through the use of that data, the Commission said, it was possible to set up an early warning system to predict new outbreaks and take swift countermeasures.
Data market is a billion euro market
The amount of data that is being produced every day is growing at a phenomenal pace. According to the Commission, the annual data volume in 2018 still accounted for 33 zettabytes (or 33 billion terabytes). By 2025, the counter will have reached 175 zettabytes. A fivefold increase. By 2030, the European Commission expects the global value of the Internet of Things and related services to be between 5 and 11 trillion euros.
According to the European Commission, these new rules have the potential to drive immense economic growth. By making data freely tradable, the combined GDP of the 27 European member states could potentially grow by as much as 270 billion euros by 2028. Increased use of real-time data analysis could save companies 10-20% in costs.
The new rules on the right of access to data will apply to all products sold on the European market. It makes no difference whether the manufacturer hails from the United States, China or the European Union itself.