Building a responsible data economy in EU

Europe has opted for a safe, sustainable and human-centric digital transformation, in accordance with the core values ​​and fundamental rights of the European Union (EU), like freedom of choice, solidarity, inclusion and participation. “The last three years have revealed how crucial digital technologies are in work, study and engage with people,” says Yvo Volman, Director of the Data directorate in the Directorate General for Communication Networks, Content and Technology of the European Commission.

For this reason, Europe has mobilized unprecedented resources to invest in the digital transition. The Digital Decade, which came into effect force in January 2023, is the policy program that aims to “empower businesses and people in a human-centric, sustainable and more prosperous digital future.”

This outlines measurable goals to be reached by 2030 in each of its target areas: connectivity, digital skills, digital business and digital public services. With digital skills, the objective is that 80% of the adult population should have basic digital skills, as compared to the current 54%.

Another key goal is to increase the number of households that have gigabit network coverage from the current 70% to 100% by 2030.

The European Declaration on Digital Rights and Principles

“We will achieve these objectives by acting according to our European Declaration on Digital Rights and Principles for the Digital Decade. This Declaration signed by the Commission, the European Parliament and the Council in December 2022 can be considered as the ‘social contract’ upon which we build a sustainable and human-centric digital transformation in Europe.” says Yvo Volman.

In conversation with the experts

The first annual report on the state of the Digital Decade was published in September 2023. Essentially, the report concludes that both the EU and Member States need to step up their level of action if the 2030 targets are to be met. The report’s goals for the Netherlands, which is traditionally a leader in digital transformation, specifies that further measures are needed regarding the use of AI by businesses and the availability of ICT specialists.

In this interview with Yvo Volman, we take a deep dive into the criticality of data, the digital transformation in the EU and the possibilities for the future.

Could you expand on the importance of data to the digital transformation?

Yvo Volman: Data is at the core of the digital transformation. We have already seen how data is reshaping the way we produce, consume and live our daily lives. And more is yet to come, for example smarter energy consumption, personalized healthcare and improved mobility.

Data is also the fuel for training artificial intelligence algorithms and, more generally, a key ingredient for innovation.

This is why the European data strategy, which was published in 2020, sets out the path for the EU to become a leader in the data economy, in particular by tapping into the potential of industrial data, and a role model for a society empowered by data to make better decisions – in business and the public sector. In our changing world, this is crucial to our competitiveness.

The data strategy puts in place a set of policy, legislative and funding measures. The overall aim is to create a European single marketplace in which data can flow between sectors and Member States in a safe and trusted manner, for the benefit of the economy and society. Individuals will play an active role in deciding who can do what with the data they contribute to producing or that are about them. This also complies with European rules regarding privacy, data protection and competition.

Common European data spaces are currently being set up in strategic sectors and domains of public interest, and these will contribute to the development of the single market for data.  These data spaces bring together data infrastructure and data governance, making data access, sharing and reuse easier.

What are some of the measures to create trust in data sharing?

Y. V.: If you are willing to share data, trust is also needed. The EU already benefits from a strong legal foundation on which to build a fair and responsible data economy, such as the General Data Protection Regulation (GDPR), which standardizes the rules for how private companies and public authorities across the EU process personal data. Another new regulation is the Data Governance Act. This has been applicable since September 24, 2023 and aims to strengthen trust in voluntary data sharing by regulating organizations that bring together supply and demand in data markets. Essentially, it creates the processes and structures to facilitate voluntary data sharing. The second deliverable, the Data Act, clarifies who can create value from data and under which conditions, thus ensuring that there is a fair distribution of the value of data. As such, these two pieces of legislation are mutually reinforcing.

The Data Governance Act has four main sets of provisions. The first is to set up a mechanism to facilitate the reuse of certain public sector data that cannot be made available as open data, such as the reuse of health data that could advance research to find cures for rare or chronic diseases. This doesn’t create a new legal basis for the reuse of data but, where national law permits reuse, these provisions come into play. We have already set up an EU register from which potential re-users will be able to find information on data is held by different public authorities.

A second set of measures aims to ensure data intermediaries will create a trusted and secure environment in which companies or individuals can share data. These intermediaries will function as neutral third parties that connect individuals and companies with data users, but they cannot use the data itself for financial profit.

The Data Governance Act also regulates data altruism, i.e. data that is made available without reward by citizens and businesses for purely non-commercial usage that benefits communities or society at large. This is important in terms of developing a human-centric data economy, as it empowers users to be able to use their data for purposes that are important to them.

EU registers for data intermediaries and data altruism organizations have been set up to help stakeholders identify registered organizations.

The Data Governance Act also establishes the European Innovation Board, which will take the form of an expert group to facilitate the sharing of best practices by Member States’ authorities and to advise the Commission on the prioritization of cross-sector interoperability standards. This Board will oversee the implementation of both, the Data Governance Act and the Data Act.

Can you tell us more about the Data Act?

Y. V.: It is an ambitious piece of legislation that came into effect on January 11, 2024, and aims to ensure fairness in the allocation of the value of data amongst stakeholders. In other words, it clarifies who can use what data and under which conditions.

A key component of the Data Act is that it gives users of connected products greater control over the data they generate. Until now, manufacturers have largely had control of the data generated by connected products, even though they had no legal right to it. Under the Data Act, users of a connected product – which could be a business or an individual – have the right to access the data that is generated through their use of the product. They can either use the data themselves or share it with a third party.

At the same time, so as not to disincentivize businesses from developing data-based products, the data cannot be used to develop a competing product. It can, however, be used to develop an ancillary or aftermarket product or service, or an entirely new one. These provisions are really important as they empower users to decide what may or may not be done with their data.

The Data Act also includes measures to increase the competitiveness of the European cloud market and protect SMEs from unfair contractual terms imposed by stronger players. It establishes a mechanism by which public sector bodies can request data from a business where there is an exceptional need and provides clear rules on how such requests should be made. An exceptional need can be, but is not limited to, a public emergency such as a pandemic or earthquake. In addition, it introduces safeguards to avoid government bodies from other countries accessing non-personal data where this would go against European law.

Finally, the Data Act defines essential requirements regarding the interoperability of data spaces and sets out interoperability provisions for use of data processing services.

How are the common European data spaces structured?

Y. V.: In February 2020, the creation of data spaces was announced in several strategic areas: health, agriculture, industry, energy, mobility, finance, government, skills, the European Open Science Cloud and the Green Deal. Since then, more data spaces have been announced in other key areas such as media and cultural heritage.

Each data space is organized by participants by considering the unique characteristics of a specific sector/domain. There is no one-size-fits-all structure. However, all common European data spaces have two common elements.

They must bring together relevant data infrastructures and governance frameworks to facilitate data pooling and sharing. And, ultimately, the goal of data spaces is to make more data available for innovation and improve the competitiveness of the companies participating in them.

We are financially supporting the development of data spaces through the Digital Europe program and we are stimulating the creation of multi-country projects. To manage such projects, we have created a mechanism that makes it easier to bring European and national money together — the so-called European Digital Infrastructure Consortia (EDICs). The Netherlands is already working with other Member States on two EDICs that are being set up to support the development of common European data spaces in the areas of mobility and logistics data and language technologies.

How will the Data Governance Act and the Data Act affect citizens?

Y. V.: Both the Data Governance Act and the Data Act will contribute to creating a human-centric data economy, in which people have more control over their data. Research shows that there is a willingness amongst citizens to engage in data altruism, but in practice this is hampered by a lack of data-sharing tools.

This is why the Data Governance Act provides a tool for people to share their data in a secure and easy way. For example, I could decide to share my mobility data to improve local traffic condition or my health data for research purposes through a recognized data altruism organization, in full confidence that my data cannot be used for any other purpose and that my data will be handled securely.

The Data Act’s measures on connected products and services will give individuals more control over their data through a reinforced data portability right. As such, I could choose to share the data generated by my car with companies that could use this data to develop aftermarket services. This, in turn, benefits me, as I could choose a cheaper repair service, or even repair my car myself. This is also important from an ecological perspective, as the lifespan of connected products will be extended.

What are the next steps?

Y. V.: We will continue to work on the implementation of the Data Governance Act and the Data Act, and to support the development and deployment of common European data spaces through EU funding programs. At the same time, we are counting on the continued support of Member States and participants in data spaces to take up these tools and work with us to achieve our vision. The European Data Innovation Board will have an important role to ensure that the key instruments of the data strategy are implemented in the same way and that good practices in one Member State can find their way to other Member States. Together, we aim to become a global leader, so that by 2030 the EU’s share of the data economy – data stored, processed, and put to valuable use in Europe – corresponds at least to our economic weight.

 This article was originally written for GOV Magazine from Eviden Netherlands. Read the original article (in Dutch)