European Data Act as an opportunity for companies and a threat to their data

The emerging European Data Act is one of the most important EU legislative proposals in the field of digitalisation. Its main objective is to create a legal framework for fair data sharing, which should increase the competitiveness of European businesses, especially SMEs, and boost the innovation potential of the European economy. The current Swedish Presidency considers the finalisation of its text in the first half of 2023 as one of its top priorities, as does the European Commission.

The proposal is very complex and contains several passages that AAVIT is trying to modify in the interest of its members through DIGITALEUROPE. The pressure to adopt it quickly has often been at the expense of the quality of the material presented. 

In the interests of Czech and European businesses, it is imperative that it protects their business secrets, data security and privacy by including effective safeguards to prevent misuse of data and unfair competition. At the same time, it should clearly define for companies what data they have to share under what conditions and provide clear definitions, for example, of the terms ‘data’ or ‘data holder’, so as to avoid overly creative interpretations. The proposal should better differentiate between business-to-business (B2B) and business-to-consumer (B2C) trade and propose sufficiently flexible rules and measures that take this distinction into account. It must also set strict conditions for business-to-government (B2G) data requests and limit their scope to urgent cases only, in order to avoid endless litigation and uncertainty for Member States. Last but not least, it should not create new barriers to international data flows, which are essential for the functioning and growth of European companies in foreign markets.

The proposed B2B data sharing is a giant leap into the unknown and threatens the business models of not only large European companies and employers, without its benefits being clearly known. If companies are forced to share data inappropriately with their competitors, it may reveal details of their internal systems, processes or technologies. This poses an existential threat to any company. 

We understand that the adoption of the European Data Act aims to strengthen the competitive environment in the digital area, and one of the motives is to prevent the monopolisation of services in the hands of large players alone. On the other hand, even well-intentioned efforts can sometimes do more harm than good. European legislators need to understand that an implicit impact of sharing sensitive data within the European space may be its leakage to third countries. This would mean that, instead of strengthening competition in the European market, the competitiveness of European companies on the global stage would be reduced. We hope that the European Data Act can be modified to be a good servant and not an evil master.