EU approves Data Act: what does it mean for Automotive industry?

The European Union has officially given the green light to the Data Act, marking a significant milestone as the first community law regulating the industrial data economy. The approval, granted on November 27, follows an agreement reached with the European Parliament on June 28, with the primary aim of fostering innovation by dismantling barriers to data access.

Scheduled to be published in the Official Journal of the European Union, the regulation will come into effect 20 days after publication, but its implementation will commence only 20 months later, not before August 2025. According to the press release, as outlined in Article 3, paragraph 1 – Simplified Access Obligations for New Products, the law will apply to “connected products and related services placed on the market 32 months after the date of entry into force of the regulation,” effectively in 2026.

Empowering Innovation and Competition

The Data Act is poised to curb illegal data traffic and enhance interoperability standards, ensuring fair competition in the service sector. The regulation promises to make after-sales and after-market assistance more cost-effective and efficient, thereby benefitting consumers and businesses alike.

For member states, the next steps involve effectively responding to the three key directives of the EU Regulation. This includes ensuring fair access to data generated by internet-connected devices, balancing the negotiating power of small and medium-sized enterprises, and facilitating data access and sharing between public entities and the private sector during emergencies.

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The Data Act grants owners and users of connected objects—ranging from smart appliances and industrial machines to connected cars—free access to the data generated by their usage. This significant shift detaches data from the product itself, distinguishing between product data and related service data. This not only safeguards trade secrets and intellectual property rights but also liberates user-generated data, preventing the abuse of contractual imbalances.

Potential Transformations in the Automotive Industry

In the automotive sector, the potential for transformation is immense. From regulating access and parking in city centers to automatic emergency call initiation following accidents, improving predictive maintenance services, revolutionizing insurance premiums based on driving styles and active advanced driver-assistance systems (ADAS), to accessing accident videos—the possibilities are vast.

The adoption of the Data Act is hailed as a catalyst for a digitally-ready Europe. José Luis Escrivá, the Spanish Minister of Digital Transformation, envisions unlocking enormous economic potential, significantly contributing to the European internal data market. The exchange and general use of data are expected to be enhanced, opening new market opportunities for citizens and businesses across Europe.

The economic potential is substantial, with the data sector projected to reach nearly €270 billion in the EU by 2028, while the Internet of Things is anticipated to scale between €5 and €11 trillion by the end of the decade.

Crucial to the Data Act is the ability to utilize data in emergency situations. The Act allows public administration to access and use data held by the private sector (business to government) in cases of natural disasters, pandemics, or terrorist attacks. The legislation ensures that businesses, particularly small and medium enterprises, will be appropriately compensated for their cooperation.

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