The Finnish Innovation Fund Sitra has participated in the European Commission’s public consultation and issued a statement on the EU’s Data Act under preparation.
The Commission presented its data economy vision in February 2020 with the publication of the European strategy for data. The legislative proposal for a Data Act is part of this. It aims to propose measures to create a fair data economy and ensure access to and use of data, including in business-to-business and business-to-government situations.
The data strategy recognised that fragmented data legislation between member states poses a risk for the single market for data. The Data Act harmonises legislation with respect to accessing and sharing data more fairly between the participants in the data economy. It does so by setting new rules that primarily target the business sector.
Sitra responded in the autumn 2021 to the Commission’s previous consultation on the Data Act.
Sitra’s main observations
Sitra supports the Data Act as a core part of the fair data economy. We strongly emphasise the proposal’s importance in complementing the digital single market in the EU, strengthening competitiveness, boosting innovation, and empowering people and data-driven societies by increasing the availability and use of data across sectors and industries.
Sitra stresses that the regulatory burden, especially for SMEs, needs to be proportionate and facilitated. For businesses, new rules mean allocating resources for compliance to avoid being sanctioned by penalties by national competent authorities. According a Sitra survey (2021), regulation is the biggest obstacle for European SMEs to become involved in the data economy. The problem is not regulation per se, rather the clarity and simplicity thereof, as SMEs typically have fewer resources to allocate on regulatory sense-making than bigger players.
Moreover, in Sitra’s experience the scope of application of the Data Act has raised questions. The proposal is an important step towards data sovereignty. The Data Act focuses explicitly on data generated by the use of Internet-of-Things (IoT) products or related services (recital 15). Based on stakeholder comments, it applications that are excluded from the scope (recital 16) could be further clarified.
On data access and use, Sitra supports the prohibition of unfair contractual terms unilaterally imposed on SMEs and the Commission’s model contractual terms. In developing the model terms, Sitra encourages the Commission to work closely with stakeholders in a bottom-up fashion and seek inspiration from the industry: many actors active in the data economy have already been proactive in this field (for example Sitra’s Fair Data Economy Rulebook, and Technology Industries Finland’s Data Sharing Model Agreement). The establishment of the Expert Group on B2B data sharing and cloud computing contracts is a welcome initiative to develop balanced model contract terms.
Sitra recognises that mandatory switching between data processing services is an ambitious and important step on the road towards a fairer data economy. This development emphasises the importance of interfaces, rulebooks, and standards, meaning soft infrastructure. Soft infrastructure is urgently needed to facilitate the data flows envisioned in the Data Act and the European Data Strategy in general. Sitra has created, in close coordination with multiple stakeholders in Finland and across the EU, an open-source rulebook and a reference architecture for data flows (the IHAN blueprint) which are used, for example, by the public sector to spearhead the digitalisation initiative Virtual Finland. These could be used as references in EU-level work.
Sitra’s statement can be read in full on the Commission’s website.