German multinational corporations, Siemens and SAP, have voiced their concerns over the draft EU laws on the use of data generated by smart gadgets and other consumer goods. The Data Act, proposed by the European Commission last year, is part of a set of legislation aimed at curbing the power of U.S. tech giants and helping the EU to achieve its digital and green objectives. However, US tech giants and German companies are critical of the proposed law. The German companies argue that a provision forcing companies to share data with third parties to provide aftermarket or other data-driven services could endanger trade secrets.
The joint letter from the companies was addressed to Commission President Ursula von der Leyen, EU antitrust chief Margrethe Vestager, and EU industrial chief Thierry Breton. In the letter, the companies highlighted their concerns that the draft law could undermine European competitiveness by mandating data sharing, including core know-how and design data, with not only the user but also third parties. 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.
The letter called for safeguards to allow companies to refuse requests to share data where trade secrets, cybersecurity, health and safety are at risk. The scope of devices covered by the legislation should not be extended. The letter was signed by the chief executives of Siemens, SAP, Siemens Healthineers, Brainlab, DATEV, and lobbying group DIGITALEUROPE.
The Commission confirmed receipt of the letter and emphasized the importance of trade secrets. However, companies should not use trade secrets as a pretext for not sharing data. Johannes Bahrke, the Commission’s spokesperson, said that the Data Act is not trying to change European or national law on trade secrets. The proposal aims to find a balance between protecting trade secrets and data sharing. There are safeguards, such as contractual and technical protections laid out in the Data Act.
The companies have also raised concerns over a provision that allows customers to switch between different cloud providers. The companies argued that the legislation should preserve contractual freedom by allowing customers and providers to agree on contracts that work best for each business case.
In conclusion, the joint letter from German corporations, SAP and Siemens, highlights the risks associated with the EU’s proposed Data Act. The letter raises concerns over the provision forcing companies to share data with third parties, potentially leading to the disclosure of trade secrets to competitors. The letter calls for safeguards to allow companies to refuse requests to share data where trade secrets, cybersecurity, health, and safety are at risk. The Commission emphasized the importance of trade secrets but also highlighted the need to find a balance between protecting trade secrets and data sharing. The companies also called for the preservation of contractual freedom in the provision allowing customers to switch between different cloud providers.