European Union lawmakers have laid out a major legislative proposal today to encourage the reuse of industrial data across the Single Market by creating a standardized framework of trusted tools and techniques to ensure what they describe as “secure and privacy-compliant conditions” for sharing data.
Enabling a network of trusted and neutral data intermediaries, and an oversight regime comprised of national monitoring authorities and a pan-EU coordinating body, are core components of the plan.
The move follows the European Commission’s data strategy announcement in February, when it said it wanted to boost data reuse to support a new generation of data-driven services powered by data-hungry artificial intelligence, as well as encouraging the notion of using ‘tech for good’ by enabling “more data and good quality data” to fuel innovation with a common public good (like better disease diagnostics) and improve public services.
The wider context is that personal data is already regulated in the bloc (such as under the General Data Protection Regulation; GDPR), which restricts reuse. While commercial considerations can limit how industrial data is shared.
The EU’s executive believes harmonzied requirements that set technical and/or legal conditions for data reuse are needed to foster legal certainty and trust — delivered via a framework that promises to maintain rights and protections and thus get more data usefully flowing.
The Commission sees major business benefits flowing from the proposed data governance regime. “Businesses, both small and large, will benefit from new business opportunities as well as from a reduction in costs for acquiring, integrating and processing data, from lower barriers to enter markets, and from a reduction in time-to-market for novel products and services,” it writes in a press release.
It has further data related proposals incoming in 2021, in addition to a package of digital services legislation it’s due to lay out early next month — as part of a wider reboot of industrial strategy which prioritises digitalization and a green new deal.
All legislative components of the strategy will need to gain the backing of the European Council and parliament so there’s a long road ahead for implementing the plan.
Data Governance Act
EU lawmakers often talk in shorthand about the data strategy being intended to encourage the sharing and reuse of “industrial data” — although the Data Governance Plan (DGA) unveiled today has a wider remit.
The Commission envisages the framework enabling the sharing of data that’s subject to data protection legislation — which means personal data; where privacy considerations may (currently) restrain reuse — as well as industrial data subject to intellectual property, or which contains trade secrets or other commercially sensitive information (and is thus not typically shared by its creators primarily for commercial reasons).
In a press conference on the data governance proposals, internal market commissioner Thierry Breton floated the notion of “data altruism” — saying the Commission wants to provide citizens with an organized way to share their own personal data for a common/public good, such as aiding research into rare diseases or helping cities map mobility for purposes like monitoring urban air quality.
“Through personal data spaces, which are novel personal information management tools and services, Europeans will gain more control over their data and decide on a detailed level who will get access to their data and for what purpose,” the Commission writes in a Q&A on the proposal.
It’s planning a public register where entities will be able to register as a “data altruism organisation” — provided they have a not-for-profit character; meet transparency requirements; and implement certain safeguards to “protect the rights and interests of citizens and companies” — with the aim of providing “maximum trust with minimum administrative burden”, as it puts it.
The DGA envisages different tools, techniques and requirements governing how private sector bodies share data vs private companies.
For public sector bodies there may be technical requirements (such as encryption or anonymization) attached to the data itself or further processing limitations (such as requiring it to take place in “dedicated infrastructures operated and supervised by the public sector”), as well as legally binding confidentiality agreements that must be signed by the reuser.
“Whenever data is being transferred to a reuser, mechanisms will be in place that ensure compliance with the GDPR and preserve the commercial confidentiality of the data,” the Commission’s PR says.
To encourage businesses to get on board with pooling their own data-sets — for the promise of a collective economic upside via access to bigger volumes of pooled data — the plan is for regulated data intermediaries/marketplaces to provide “neutral” data-sharing services, acting as the “trusted” go-between/repository so data can flow between businesses.
“To ensure this neutrality, the data-sharing intermediary cannot exchange the data for its own interest (e.g. by selling it to another company or using it to develop their own product based on this data) and will have to comply with strict requirements to ensure this neutrality,” the Commission writes on this.
Under the plan, intermediaries’ compliance with data handling requirements would be monitored by public authorities at a national level.
But the Commission is also proposing the creation of a new pan-EU body, called the European Data Innovation Board, that would try to knit together best practice across Member States — in what looks like a mirror of the steering/coordinating role undertaken by the European Data Protection Board (which links up the EU’s patchwork of data protection supervisory authorities).
“These data brokers or intermediaries that will provide for data sharing will do that in a way that your rights are protected and that you have choices,” said EVP Margrethe Vestager, who heads up the bloc’s digital strategy, also speaking at today’s press conference.
“So that you can also have personal data spaces where your data is managed. Because, initially, when you ask people they say well actually we do want to share but we don’t really know how to do it. And this is not only the technicalities — it’s also the legal certainty that’s missing. And this proposal will provide that,” she added.
Data localization requirements — or not?
The commissioners faced a number of questions over the hot button issue of international data transfers.
Breton was asked whether the DGA will include any data localization requirements. He responded by saying — essentially — that the rules will bake in a series of conditions which, depending on the data itself and the intended destination, may mean that storing and processing the data in the EU is the only viable option.
“On data localization — what we do is to set a GDPR-type of approach, through adequacy decisions and standard contractual clauses for only sensitive data through a cascading of conditions to allow the international transfer under conditions and in full respect of the protected nature of the data. That’s really the philosophy behind it,” Breton said. “And of course for highly sensitive data [such as] in the public health domain it is necessary to be able to set further conditions, depending on the sensitivity, otherwise… Member States will not share them.”
“For instance it could be possible to limit the reuse of this data into public secure infrastructures so that companies will come to use the data but not keep them. It could be also about restricting the number of access in third countries, restricting the possibility to further transfer the data and if necessary also prohibiting the transfer to a third country,” he went on, adding that such conditions would be “in full respect” of the EU’s WTO obligations.
In a section of its Q&A that deals with data localization requirements, the Commission similarly dances around the question, writing: “There is no obligation to store and process data in the EU. Nobody will be prohibited from dealing with the partner of their choice. At the same time, the EU must ensure that any access to EU citizen’s personal data and certain sensitive data is in compliance with its values and legislative framework.”
At the presser, Breton also noted that companies that want to gain access to EU data that’s been made available for reuse will need to have legal representation in the region. “This is important of course to ensure the enforceability of the rules we are setting,” he said. “It is very important for us — maybe not for other continents but for us — to be fully compliant.”
The commissioners also faced questions about how the planned data reuse rules would be enforced — given ongoing criticism over the lack of uniformly vigorous enforcement of Europe’s data protection framework, GDPR.
“No rule is any good if not enforced,” agreed Vestager. “What we are suggesting here is that if you have a data sharing service provider and they have notified themselves it’s then up to the authority with whom they have notified actually to monitor and to supervise the compliance with the different things that they have to live up to in order to preserve the protection of these legitimate interests — could be business confidentiality, could be intellectual property rights.
“This is a thing that we will keep on working on also in the future proposals that are upcoming — the Digital Services Act and the Digital Markets Act — but here you have sort of a precursor that the ones who receive the notification in Member States they will also have to supervise that things are actually in order.”
Also responding on the enforcement point, Breton suggested enforcement would be baked in up front, such as by careful control of who could become a data reuse broker.
“[Firstly] we are putting forward common rules and harmonized rules… We are creating a large internal market for data. The second thing is that we are asking Member States to create specific authorities to monitor. The third thing is that we will ensure coherence and enforcement through the European Data Innovation Board,” he said. “Just to give you an example… enforcement is embedded. To be a data broker you will need to fulfil a certain number of obligations and if you fulfil these obligations you can be a neutral data broker — if you don’t
Alongside the DGA, the Commission also announced an Intellectual Property Action Plan. Vestager said this aims to build on the EU’s existing IP framework with a number of supportive actions — including financial support for SMEs involved in the Horizon Europe R&D program to file patents.
She said the Commission is also considering whether to reform the framework for filing standards essential patents. But in the short term Vestager said it would aim to encourage industry to engage in forums aimed at reducing litigation.
“One example could be that the Commission could set up an independent system of third party essentiality checks in view of improving legal certainty and reducing litigation costs,” she added, noting that protecting IP is an important component of the bloc’s industrial strategy.
So let’s talk about why Metromile might be plying the public markets, and why Hippo may have have decided to pick up more cash. Hint: The reasons are related.