Data exchange: What the Data Act regulates

Connected data is the foundation for digital transformation and new products, services, and business models. Yet, around 80 percent of all generated industrial data remains unused! At least, that was the European Commission's estimate in 2022. No company can afford to simply leave valuable data treasures untapped.

The importance of data and platforms

Using data within your own company can be crucial for long-term profitability. However, the exchange of data with partners or customers is also becoming more important every year.

Data not only ensures process optimization internally, but also guarantees compliance with regulatory requirements . For instance, industrial companies rely on supplier data to fulfill their supply chain due diligence obligations or to contribute to a closed-loop circular economy.

On the other hand, data sharing with other companies helps to optimize downstream stages in the supply chain. However, just 27 percent of German companies share their data in such models. A major reason for this is data privacy concerns.

The Data Act is intended to facilitate the cross-company exchange and use of data within the EU. Beyond a regulatory framework, however, this also requires a technical infrastructure necessary for a secure data flow – for example, in the form of platforms.

Data in the cloud

In the age of digitalization, more and more companies are relying on cloud platforms. Analysts estimate that by 2027, over 70 percent of companies will be using industrial cloud platforms to accelerate their business initiatives.

Cloud solutions for industry often combine public cloud services with specialized functionsthat offer flexible options for change. In this way, such platforms simplify access to new technologies such as artificial intelligence or the Internet of Things (IoT). Industrial cloud platforms are also essential for processing and exchanging data securely. A prerequisite for this is a clean industrial data foundation.

Benefits and hurdles of an industrial data foundation

An industrial data foundation refers to all data that in manufacturing companies are available and serve to fully leverage the benefits of digitalization. Such a database allows, for example, for the analysis of data streams as a foundation for optimizations in development or sales.

However, building such a database is a complex challenge. One internal hurdle is the fact that employees are often not sufficiently trained in data protection to collect data securely. Furthermore, there is often uncertainty regarding usage rights. Other companies fear disclosing too much data.

Organizations that are fundamentally open to data exchange therefore desire clear rules for handling third-party data. The General Data Protection Regulation (GDPR) governs the protection of personal data. However, companies also require clear usage and ownership rights specifically for industrial data.

There is significant uncertainty, especially regarding international data transfers . Cross-border data exchange is possible if the level of data protection in a given third country is comparable to that of the EU. However, 88 percent of German companies reportthat they are often unable to assess the level of data protection in third countries themselves. Many are therefore pinning their hopes on the EU Data Act.

Data Act: Impacts and Challenges

With the regulation that has been in effect within the European Union since the beginning of 2024 Data Act The EU aims to promote (cross-border) access to and the sharing of industrial data by establishing clear rules . Together with the Data Governance Act, this is intended to create a framework for a data market for the growing volume of corporate data in Europe. A transition period until September 12, 2025applies to the implementation of the regulation.

Who is affected by the Data Act?

The Data Act affects manufacturers and providers of connected products and services, for example in the fields of IoT, mechanical engineering, mobility, or smart homes. It also affects public authorities and users of connected products. The latter includes operators who use IoT devices in production. However, there will be relief measures for SMEs.

How does the Data Act regulate data sharing?

The Data Act complements the GDPR and focuses on industrial data. Among other things, it regulates the transfer of data from companies to consumers and the data exchange between companies. One of the new obligations for companies is to make data generated through the use of connected products or related services accessible.

In addition, companies must pre-contractual information obligations that apply, for example, when selling IoT products. Sellers of connected products must inform future users about the estimated scope of the data collected or clarify whether real-time data is being generated. On the other hand, users must be granted access to their data upon request.

On the safe side

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