Gaps in Big Data ownership protections might not require new laws, report for EU finds

Servers

7 December 2016. By Magnus Franklin.

EU policymakers should tread carefully when considering new laws governing Big Data as there is so far “no reliable understanding” of their impact on data-ownership rights, according to a report that will be considered as part of a policy revamp.

The report, by law firm Osborne Clarke, found that contractual arrangements are likely to continue to be the main way for companies to assert ownership rights for the use, storage and handling of large datasets generated by the digitalizing economy, and that this causes no immediate problems.

The report goes on to say that differences between national laws across the EU “do not seem to cause significant additional issues” for managing ownership rights for data uploaded to the Internet, by everything from nuclear research facilities to self-driving cars and smartphone apps.

The study will feed into the European Commission’s policy work on the subject, and it suggests that the EU executive has considered drafting legislation to manage Big Data rights as part of its new policy direction, which will be announced in January.

The report’s authors encourage commission officials not to rush into legislating to protect Big Data rights. “It seems to be rather unclear what the economic effects of a statutory right in data would be,” the report says.

The report’s caution may explain why the commission has decided to put legislation on data-ownership rights on the backburner, instead opting to publish a policy paper and seek further feedback to scrutinize Big Data ownership rights.

“It appears to be premature to attempt to identify aspects of the legal framework which could be supplemented with further legislation,” the report says. This is particularly the case because an EU law governing trade secrets, which has yet to come into effect, could have a significant impact on how data ownership is defined.

“It is essential to assess the economic impact of a right in data in detail before considering further legislation,” the report says.

Until the impact of legislation is better understood, the report suggests exploring how competition law would apply to data sets, and how further discussion on the use of standard terms to simplify the drafting of contracts governing data ownership would be of greater use.

“Competition law can provide a powerful constraint on the extent to which either [intellectual property] rights or contractual arrangements can be used to maintain a market advantage in a data-led market,” the report says.

“Accordingly, where . . . arrangements concerning commercial or technical data damage economic efficiency, competition law may provide a means for managing that impact,” it adds.

In a note on its website accompanying the report, the commission said: “the findings of this study are essential for the . . . upcoming communication on ‘Building a European Data Economy’, scheduled for January 2017.”

The commission plans to focus on the narrower subject of access to, and reuse of, data for processes that are entirely data-driven or even autonomous — that is, business practices that take place without human involvement.

It is expected that any policy measures by the commission will target types of data that aren’t currently governed by data protection, trade secrets and IP laws. This points to data generated by industrial processes, rather than ones that target consumers.

“As there is no comprehensive legislation available, businesses have to draft their contracts especially carefully,” the commission says in its accompanying note.

“[Any] business based upon generating, collecting and exploiting data currently needs to take extreme care in both defining and obtaining the rights necessary for the uses it proposes to make of the data,” the commission added.

The policy paper, known as a “communication,” is set to be unveiled on Jan. 11, 2017.