You may have heard of GDPR, the general data protection act which was adopted by the EU member states back in 2018. The regulation caused quite a stir in big and small companies alike due to its extensive requirements and heavy fines. Later, however, it has been seen as a game changer for strategically positioning Europe as a haven for personal data and as a defensive move against the data incursions by the American and Chinese digital giants.
Now there is a new act in town, as the EU has formally published a proposal for a second major data regulation called the “Data Act”, which targets the industrial, non-personal data of companies. Unlike GDPR, this legislation is not prohibitive but rather aims to provide open and fair access to data for both public and private sector companies. Once the proposed regulation is activated after 2023, it is expected to create 270€ billion of additional GDP by 2028.
What is the Data Act about?
What is the data act, then? In a nutshell, it tries to achieve at least the following:
- Provide consumers with easier, safer, and more direct access to product and service data of companies.
- Clarify rights to data sharing between third parties
- Guard especially micro and SME company rights in data sharing contracts so that they are fair, reasonable, and non-discriminatory
- Require data processing services to remove technical and contractual obstacles for exchanging service providers
- Provide rights to public sector authorities to exceptionally access private company data
This list is not exhaustive but provides a glimpse at what the legislators believe the European future needs. Data ecosystems are made up of both public and private sector companies creating fair value from interconnected data streams safely and without fear of vendor lock-ins. These types of data ecosystems are becoming more common as companies are tackling larger, systemic problems such as material circulation and sustainability.
How can companies benefit from this new regulation, then? The EU impact report estimates that the main benefits will come from empowering consumers and companies in the commercial use of connected products and related innovation. They also believe that the public sector administrative burden will be greatly reduced by opening the private sector data vaults.
To prepare and take advantage of the regulatory changes, companies can already do three things:
- Prepare the company operating model to allow ecosystem cooperation and data exchange
- Build technical capabilities to rapidly utilise and share data without risking operational integrity
- Train employees in data business models and reward data cooperation both internally and towards third parties
Taival Advisory has been monitoring and contributing to the development of the legislation and has supported various public and private companies in realising the fair value of data-sharing business models. Thanks to our wide expertise in both digital and sustainability sectors, we are uniquely positioned to help companies in identifying and leveraging the opportunities presented by the legislation.
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