The Commission has published its Data Economy Package for non-personal data*, which is the final building block of its Digital Single Market (DSM) strategy.
With its new package, the Commission aims to:
• review the rules and regulations impeding the free flow of non-personal data and present options to remove unjustified or disproportionate data location restrictions; and
• outline legal issues regarding access to and transfer of data, data portability and liability of non-personal, machine-generated digital data.
The package includes a Consultation on Building the European Data Economy, a Communication and Staff Working Paper.
Why is the Commission acting on data?
The economic rationale is that the EU data economy was worth €272 billion in 2015, and is experiencing close to 6% growth a year. It is estimated that it could be worth up to €643 billion by 2020, if appropriate policy and legal measures are taken. Data also forms the basis for many new technologies, such as the Internet of Things and robotics. The Commission’s ambition is for the EU to have a single market for non-personal data, which the EU is a long way from achieving. The Commission refers to the issues in terms of – the “free movement of data”, suggesting something akin to a fifth EU fundamental freedom.
What action is the Commission proposing to take?
The Consultation sets out options for addressing the legal barriers to the free flow of non-personal data, in particular in relation to:
• data access and transfer;
• unjustified localisation of data centres;
• liability related to data-based products and services; and
• data portability.
Some of the more eye-catching (and interventionist) options set out by the Commission are the introduction of:
• legislation to define a set of non-mandatory contract rules for B2B contracts when allocating rights to access, use and re-use data;
• creation of a sui generis data producer right for non-personal machine-generated data, with the aim of enhancing tradability; an obligation to license data generated by machines, tools or devices on fair, reasonable and non-discriminatory (FRAND) terms; and
• technical standards to facilitate the exchange of data between different platforms.
The Consultation is also seeking evidence on whether anti-competitive practices are restricting access to data. In particular, the Consultation refers to: the use of unfair business practices; the exploitation of bargaining power when negotiating licences; and abuses of a dominant position. Interestingly, it also asks whether current competition law and its enforcement mechanisms sufficiently address the potentially anti-competitive behaviour of companies holding or using data.
So where are we headed?
To date, competition law has mandated the compulsory licensing of IP rights only in exceptional circumstances, where the owner has a dominant position and there are no alternatives to the technology. The Commission is now considering a range of regulatory options, of which the most interventionist could require access to be granted to non-personal data in a far wider range of contexts (albeit without any proposal to amend the existing database right and the new Trade Secrets Directive). These issues are likely to be of considerable concern for any company holding large amounts of non-personal data. The Consultation runs until 26 April 2017.