Data is the new oil – the metaphor neatly sums up what market participants have long known. In the age of the Internet of Things, data can be a valuable commodity. Does anyone own this commodity? If no, does the digital economy call for the creation of a right to data?

1. Public consultation “Building a European Data Economy”

In a previous alert, we talked about the FTC’s conference on automated vehicles in Washington on June 28, 2017. Automated cars and related legal issues are also hotly debated in Europe. In January, the European Commission asked stakeholders to participate in the public consultation “Building a European Data Economy”. A public consultation is a process by which the views of the public on legislative initiatives are sought; the Commission as the institution entrusted with the task of proposing new European Union legislation resorts to this process on a regular basis.

The “Building a European Data Economy” consultation raised the question to what extent digital non-personal machine-generated data are traded and exchanged. The Commission also wanted to know whether the evolving technological landscape calls for the creation of an ownership-type right to machine-generated data.

2. Summary report: A cause for concern

The consultation ended in April 2017. The European Commission has not yet issued a synopsis report with conclusions, but a summary report is publicly available. This summary report indicates that a significant number of businesses (including companies from the automotive and the electronics sector) participated in the consultation, and that the proposal to introduce a right to data is cause for some concern.

According to the European Commission, the majority of respondents do not support the creation of a new type of ownership right in data through regulation. Critics of any new rights suggest that an economic case for such rights has not yet been made and the recognition or creation of new rights could interfere with innovation based on ease of data flows and access.

If a right to data were established, the need to address the conditions and circumstances of access rights for third parties among other issues would immediately arise. Indeed, in connection with connected vehicles, a significant number of respondents call for an obligation to license access to in-vehicle data. While many requested compulsory access and licensing of vehicle data this may well be contested in the EU and elsewhere. In the US, for example, access to and use of data from electronic data recorders in vehicles is heavily restricted for privacy and other data protection purposes.

3. Interplay with the GDPR

The creation of a right to data would also have to be reconciled with the GDPR, which will come into effect in 2018. Under art. 20 GDPR, an individual “shall have the right to receive the personal data concerning him or her, which he or she has provided to a controller, in a structured, commonly used and machine-readable format and have the right to transmit those data to another controller”.

In its guidelines (last updated in April 2017), the Article 29 Data Protection Working Party (“Working Party”) interpreted this provision fairly broadly. The members of the Working Party take the view that data provided by an individual also includes data resulting from the observation of its activity. Their interpretation of art. 20 GDPR seems to blur the distinction between non-personal machine-generated data on the one hand and personal data on the other hand.

If data gained by observation falls into the scope of art. 20, the GDPR adds another layer of complexity. That is because connected devices, such as automated vehicles, not only collect data about the performance of the machine, but also that of the user. Questions and disputes about rights in experiential and usage-related data are already becoming pervasive in business-to-business contexts. Adding an additional layer of complexity where two parties to a communication interact and one is a consumer data subject will be the basic question of who, if anyone, should have an exclusive right to the learning from such interactions. Shall data about the use of an automated car be subject to the driver’s portability right as well as a right to data vested in the manufacturer?

4. Outlook

The Commission originally planned to publish a more comprehensive report, and to draw conclusions in July 2017. While the report has not yet been published, it may be premature to speculate about the European Commission’s next steps. In any event, one must not fail to note that the project enjoys strong support in some circles. To give but one example, earlier this year the German secretary for transport emphasized it “was about time we moved away from the principle of data avoidance to data ownership”.

Client Alert 2017-186