The draft of the Data Act given by the European Union has caused widespread concerns among companies including Siemens and SAP. These companies have argued that the act could potentially put their trade secrets at risk. The proposed legislation aims to regulate the use of data in the European Union. The act is expected to promote the free flow of information across the countries involved. While the act’s objective is to ensure that personal data and intellectual property rights of customers are protected, some companies believe that the policy could lead to unintended consequences if introduced. They have said that the legislation could damage their competitiveness and profitability. As per claims made in a report, the European Union has been concerned after Edward Snowden, a U.S. contractor revealed the extent of surveillance conducted by the United States.
According to a Reuters report, German businesses including software developing firm SAP and engineering company Siemens have joined the long lost of U.S. tech giants who are criticizing the draft act that the EU has proposed. EU countries and EU lawmakers are currently considering implementing the act and are working on making it a perfect fit. The draft law is just a part of a set of legislation which includes the consumer and corporate data of companies in the European Union. The legislation aims to curb the powerful position of U.S. tech giants in the European market and help the EU in achieving its digital and green objectives.
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The Problems with the act:
Numerous U.S. based firms have criticized the proposed law claiming it to be very restrictive. Several German companies have also expressed their concerns surrounding the implementation of the act. They have cited that a provision forcing companies to share data with third parties might put their trade secrets at risk. Although the provision aims to provide after market or other data-driven services, it definitely has the potential put endanger the trading details of the companies.
The companies have written a joint letter to the European Commission President Ursula von der Leyen, EU antitrust chief Margrethe Vestager and EU industrial chief Thierry Breton. In the letter they have said, “It risks undermining European competitiveness by mandating data sharing – including core know-how and design data – with not only the user, but also third parties”. They further said, “Effectively, this could mean that EU companies will have to disclose data to third-country competitors, notably those not operating in Europe and against which the Data Act’s safeguards would be ineffective”. As per claims made by Reuters, the signatories of the letter included the Chief Executives of Siemens and SAP, Siemens Healthineers, the German medical company Brainlab, the software firm DATEV and lobbying group DIGITALEUROPE.
Suggestions:
The companies have suggested the European Union to make some changes to the act to safeguard particular information. They have suggested adding an exceptional case that allows companies to withhold information which put trade secrets, cybersecurity, health and safety at risk. They have also requested them to not extend the scope of devices which the legislation includes. Another provision that has raised concerns is a system which would allow businesses to provide third-party organizations with partial access to their data for analysis and processing.
Conclusion:
In conclusion, the EU draft Data Act has raised concerns among businesses that it could potentially put their trade secrets at risk. While the law may be beneficial for the European Union, they must ensure that the act includes strong measures to protect trade secrets and provide more information on the rules surrounding data sharing and access. This would not only help them to gain the complete trust of businesses which are being affected.
