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EU Unveils Rules to Force Firms to Share Product Usage Data

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(Bloomberg) -- The European Union unveiled new rules that will make it easier for users to transfer data generated from products like Amazon.com Inc.’s Alexa or a Tesla Inc. vehicle.

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The European Commission’s Data Act will set rules on how companies can access so-called non-personal data, or data that does not contain any information that identifies an individual. The proposal will impact a wide variety of sources, including information collected in machinery and connected devices, such as smart home appliances.

For example, under the new rules, the driver of a car could request that any data generated on the performance of the vehicle be sent to a repair shop of their choice. This could help customers get cheaper services rather than being obligated to go directly to the car company, according to the commission.

Cloud service companies such as Amazon and Microsoft Corp. will also be forced to make it easier to switch between providers.

The proposal will help smaller businesses so “they don’t have all their data sucked away from them by big companies,” Thierry Breton, the EU’s internal market chief, said at a press conference on Wednesday. It will give users more control of their data so it’s not “held captive by a given supplier,” he said.

The commission’s competition chief, Margrethe Vestager, added that “it also boosts competition by allowing more companies to offer their services.”

The proposal will now go to EU countries and the European Parliament for approval but could take years to go into effect.

Companies are already concerned that the new rules would hurt non-EU businesses and make data flows with the EU more difficult. Very large tech companies like Google are unlikely to benefit from the easing of data transfers, according to the proposal.

“The Data Act will serve the EU’s digital ambitions if it protects confidential business information, treats all companies equally, and avoids creating new data flow restrictions,” said Alexandre Roure, public policy director at ​​the Computer and Communications Industry Association.

The proposal also lays out news rules stating:

  • Companies are prohibited from unfair contracts that inhibit sharing data with smaller companies

  • Companies must make data available to the public sector in emergencies

  • Firms must allow users of connected devices access to data generated by them

European regulators have been steadily laying down stricter rules over how companies handle user data. The Irish data protection authority is currently considering the legality of a contract that allows firms to ship vast amounts of commercial data across the Atlantic.

The Data Act will also ask firms to introduce safeguards to stop non-EU governments from accessing data, and force firms to allow users to transfer data between cloud providers at no additional cost.

“Regulation should not institute conflicts of laws nor create obstacles to data transfers,” Emilie Petras-Sohie, IBM Europe’s senior legal and policy manager, said in a statement. “And cloud switching requirements should strike the right balance between avoiding vendor lock-in and allowing cloud providers to offer innovative services.”

(Updates with quotes in fifth, sixth paragraphs.)

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