European tech leaders are speaking out against the new EU Data Act

The Data Act is supposed to make it easier for European consumers and businesses to access the data generated by their internet-connected devices, and to encourage the sharing and reuse of that data by a variety of businesses and public-sector organizations. It’s also meant to give smaller companies a stronger hand when negotiating data-sharing contracts with larger partners—and when trying to switch cloud providers for the crunching of their data. 

The European Commission proposed the bill in February 2022, and the European Parliament cleared it in March, so it’s now in final “trilogue” negotiations between those institutions and representatives of the bloc’s national governments. Advocates for the bill say it could have particularly powerful implications for artificial intelligence, by making large amounts of industrial data available for the training of A.I. models. It could also have major implications for the development of “smart cities,” they say. 

However, the proposal has plenty of critics, with Big Tech firms sounding off through their trade associations. The Information Technology Industry Council (ITI) complained in March that the law was too vague—which is something Germany has also been concerned about—and lacked strong safeguards for the protection of trade secrets, among other issues. 

It’s certainly unsurprising to see U.S. tech firms complain, as they tend to be the big beasts that the bill aims to tame. But some of the EU’s biggest tech CEOs have also weighed in now, via a letter calling on the European Commission to “pause and rethink” the legislation. 

Signatories included Siemens CEO Roland Busch and SAP CEO Christian Klein, along with representatives of the DigitalEurope trade body, whose members include a mix of U.S. and European companies ranging from Google to Bayer. The letter, which Fortune has seen, was sent to Commission President Ursula von der Leyen last Thursday.

“Despite progress made [over the past year], the current proposal is not yet fit for purpose and could do lasting damage to the competitiveness of some of Europe’s most successful companies employing millions of people,” the letter read, adding that the forcing of data-sharing would be “breaking the backbone of future data-driven European business models, with little guarantee of what comes next.

“Safeguards are needed to ensure that companies can refuse requests to share data where trade secrets, cybersecurity, health, and safety are at risk,” the signatories wrote. They also complained that negotiations are happening at “breakneck speed…leaving little room to discuss these complex details in depth,” and lobbied against the bill’s cloud elements. 

“The Data Act should…preserve contractual freedom, allowing cloud providers and customers to agree on terms and conditions that reflect business needs,” said SAP’s Klein in a DigitalEurope statement. “Fixed-term contracts should not be questioned by the Act as they have proven to be beneficial for both cloud providers and customers.”

The European Commission responded by telling Euronews it “isn’t trying to change European or national law on trade secrets. However, it’s important that trade secrets aren’t used as an excuse for not sharing data. We have to find the balance there.”

That balance will need to be struck in the trilogue negotiations, which tend to be accompanied by particularly feverish lobbying—partly because they’re the last chance to modify a law, and partly because they always take place behind closed doors. Whatever the result, Europe will soon be regulating most types of data, from personal to industrial, in some kind of way.

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David Meyer

Data Sheet’s daily news section was written and curated by Andrea Guzman.

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BEFORE YOU GO

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