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April 2022

The “Data Act”

Massimo Brunamonti

The proposed regulation presented by the European Commission aims to clarify who can use and for what purposes all the data generated by "connected cars"
Even if free and fair competition is not the main the goal, the so-called "Data Act", presented as a preliminary proposal by the European Commission on February 27, carries significant implications for the automotive aftermarket. The purpose of the Data Act is to clarify and regulate who can use and for what purposes all the data generated by "connected cars".

The initiative, which is the result of a political agreement at European level, aims to eliminate data access obstacles for citizens as well as public and private operators, while preserving, for data creators, incentives in digital technology investments, assigning to them a balanced control over their creations. According to the Commission, the Data Act will give citizens and businesses greater control over their data through a reinforced right of data portability, thanks to which, for example, the owner of a vehicle will be able to decide to share the data generated by his vehicle with his trusted mechanic. The sum of the data of several users may also contribute to the development or improvement of other digital services, such as car diagnostics. For their part, SMEs, which are the majority of car repair companies, would have greater negotiating power with cloud and telematic service providers under the Data Act. In addition, SMEs will be protected against unfair contractual terms imposed by a party enjoying a significantly stronger market position; in case of high and obvious differences between the parties, a "test of unfairness" of the clauses is provided in order to help the weaker parties to enter into balanced agreements with those who enjoy a significantly stronger negotiating position. While these general rules are certainly necessary, they are, in some cases, not sufficient; this is what the entire world of independent aftermarket operators argue.

This digitalization process will produce, it is estimated, a turnover of about 500 billion euro for in-car services by 2030, the new "black gold", nobody wants to relinquish, and the political pressure is enormous. Commissioner Thierry Breton insisted on a single act covering all aspects of the matter as an alternative to sector-specific legislation, long called for by the independent aftermarket. It took Competition Commissioner Margarethe Vestager insisting for sector-specific legislation to be included in the agenda for auto aftermarket and other similar sectors, where the imbalance of forces is such that tailor-made MV-BER-type measures are required. It is understood that the staffs of Commissioner Vestager and Commissioner Vălean (Transport) are working on a specific act for the automotive aftermarket to be presented by the end of the year and consultations on this should start immediately. In contrast to the automakers' position, Afcar, the alliance for the freedom of car repair in Europe, argues that unless sufficient data is shared, the situation will generate serious competition issues. They were recently joined by Beuc, the European Consumer Association, which also expressed concern about the growing involvement of hi-tech giants in the automotive market due to which a "dystopian scenario" could unfold.

The concerns of both AFCAR and BEUC have evidently had an initial effect with the opening of the consultations mentioned above, but the problem could remain unresolved if the timeframe is not quick enough; for this reason it is necessary to intervene also by ordinary means within the scope of the delegations already granted, for example by modifying the annexes of Regulation 858, so as to conclude the work within the terms of this legislature, that is, by April 2024. Time is short, but in addition to this it is also necessary for the measures to be robust; as Afcar brilliantly summarized, "It is crucial that the sector-specific regulation on access to in-vehicle data be significant and address the problem of the abusive role of access control enjoyed by car manufacturers".

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