EU digital legislation

DA-Update - Episode 1: Which products does the Data Act-Proposal apply to?

The European Commission has presented a proposal for a Regulation on harmonised rules on fair access to and use of data (Data Act), to which the European Parliament and the Council of the European Union have meanwhile adopted their positions (you can find out more about the individual drafts in our overview of EU digital legislation). In the following, the Commission draft serves as a basis (hereinafter "DA-Proposal"). Where necessary, differences based on the Parliament and Council drafts are outlined.

The material scope of application is defined in Art. 1 Para. 1 DA-Proposal. Accordingly, the DA-Proposal applies to “making data generated by the use of a product or related service available”.

Besides this, the Data Act Proposal regulates, among other things.

  • the conditions for the making available of data,
  • the handling of unfair contractual terms vis-à-vis SMEs regarding data access,
  • the making data available to public sector bodies,
  • rules on switching between data processing services.

Thus, when determining the material scope of the proposed regulation, the terms data, product and related service are of particular importance.

Data

The term "data" is defined in Art. 2 No. 1 DA-Proposal as any digital representation of acts, facts or information. This also covers compilations and includes sound, visual or audio-visual recording. Data in the sense of the draft are therefore all ones and zeros, regardless of whether they are in text, audio or image format. Data that is derived from raw data only through calculations by software (derivative data) is excluded from the definition. The definition of data according to the proposed regulation is thus broad and covers both personal and non-personal data equally.

Product

According to the Commission's proposal, the term "product" means an item that collects data concerning its use or environment and that is able to communicate data via an electronic communications service and whose primary function is not the storing and processing of data. Thus, hard drives and other forms of storage media are not addressed by the DA-Proposal. Products that are primarily designed to display or play content, or to record and transmit content are also not intended to be covered by the definition of a product. This includes, for example, computers, smartphones and cameras. In principle, however, any product that can be connected to the Internet, i.e., anything from a connected vehicle to a smart refrigerator, will fall within the scope of the regulation.

In deviation from the Commission's draft, the scope of the term "product" in the drafts of the Parliament and the Council is narrowed considerably. While the draft of the Parliament uses the term "connected" products, i.e. products that are actually accessible, the Council draft uses the term "readily available data". In the latter case, the data must even be directly accessible for the product definition in the Council draft to apply. The Parliament and the Council thus define the term "product" in a noticeably narrower way.

Related service

According to the Commission proposal, the term "related service" means a digital service that is incorporated in or inter-connected with a product in such a way that the product would not be able to perform one of its functions without it. The (necessary) connection to a network, i.e. in particular to the Internet, is therefore crucial for there to be a related service within the meaning of the DA-Proposal.

The draft of the Parliament additionally requires that data of the connected product be accessed by the provider or service. The other drafts thus define this term more narrowly as well.

Recommendations

The ongoing legislative procedure should be followed with regard to possible amendments to the material scope of application. This applies in particular against the background that both the Parliament and the Council are calling for changes to the scope of application in their positions. The question of the scope of application will be clarified further as the negotiations between the Parliament, the Council and the Commission continue to proceed and the legislative process progresses.

In our DA Update series, we regularly provide you with information on the proposed Data Act of the European Union and keep you informed about changes in the ongoing legislative process. In each of our articles, we give you a brief overview of a specific topic, presenting the most important aspects and practical implications.

Lawyer, Senior Associate
Johannes Zwerschke, LL.M.
Lawyer, Senior Associate
Johannes Zwerschke, LL.M.

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DA-Update

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DA-Update - Episode 1: Which products does the Data Act-Proposal apply to?

The European Commission has presented a proposal for a Regulation on harmonised rules on fair access to and use of data (Data Act) to which the European Parliament and the Council of the European Union have meanwhile adopted their positions (you can find out more about the individual drafts in our overview of EU digital legislation). In the following, the Commission draft serves as a basis (hereinafter "DA-Proposal"). Where necessary, differences based on the Parliament and Council drafts are outlined.