Data sharing and competition law
Publication Date/Time
2023-05-05T08:00:15+00:00
Country
Europe
The state of play and the way forward
BENEFITS OF (OPEN) DATA SHARING 

Open data is the most far-reaching approach of data sharing for at
least three reasons. Firstly, while data sharing can also happen
against remuneration, the concept of open data allows to make data
freely available without restrictions. Secondly, access to and reuse
of open data is granted to all: from public sector bodies to private
companies, and individuals. Thirdly and most importantly,
disseminating data as open data and enabling its reuse has the
potential to generate benefits not only at societal level, but also
for our economy.  

Open data is often first associated with public bodies publishing data
to enable more government transparency or facilitating citizens’
access to public services. Yet, sharing open data can also benefit
companies and Small- and Medium-sized Enterprises (SMEs) (Figure 1).
The latter constitute the backbone of European economies, representing
99% of all businesses in the EU
[https://single-market-economy.ec.europa.eu/smes_en]. 
[https://data.europa.eu/sites/default/files/img/media/3.competition2-02.png]
_Figure 1 - Visualisation of SMEs in the European Union _

A practical example of how (open) data sharing can benefit SMEs comes
from C4P [http://www.c4p.io/], one of the 30 reuse cases interviewed
for the Use Case Observatory
[https://data.europa.eu/sites/default/files/report/The_Use_Case_Observatory_Volume_I_0.pdf].
C4P is itself an SME using open data from Tenders Electronic Daily
(TED [https://data.europa.eu/data/datasets/ted-csv?locale=en]) to
develop a machine-learning algorithm that provides insights into EU
public procurement. By doing so, C4P has already helped several
companies in Europe to find opportunities that best suit their
competencies, to understand competition, and find relevant
collaborators. 

Another example of (open) data sharing in support of businesses in
Europe is Open Food Facts [https://eu.openfoodfacts.org/], winner of
the EU Datathon 2018
[https://op.europa.eu/en/web/eudatathon/2018-edition] challenge
‘European Food Safety Authority – Fostering data reuse and
innovation’. Open Food Facts offers a multilingual database of food
products and their characteristics. This database is based on open
data - among others from the European Food Safety Agency
[https://data.europa.eu/data/datasets/53699e2aa3a729239d205dea]
(Figure 2) and the French open data portal (data.gouv.fr
[https://www.data.gouv.fr/en/]) -, and can be accessed, nurtured, and
reused by anyone for any purpose. So far, the data shared by Open Food
Facts has been reused for more than 200 apps and services
[https://data.europa.eu/sites/default/files/course/2022-10-EN-Open%20Food%20Facts%20-%20data.europa.pdf]. 
[https://data.europa.eu/sites/default/files/img/media/3.competition2-01.png]
_Figure 2 – Example of dataset reused by Open Food Facts and
provided by the European Food Safety Agency _

MARKET COMPETITION AND DATA 

The use cases above show the importance and potential of open data and
data sharing. Yet, the ability to collect and retain exclusive control
over data comes with multiple challenges and the risk of
anti-competitive practices. If no alternative data source exists, a
large and powerful data holder could impose limitations to access this
data, preventing other companies from competing in the market. 

To ensure consistency between data access rights and further stimulate
business-to-business and business-to-government data sharing, the
European Commission proposed the Data Act
[https://ec.europa.eu/commission/presscorner/detail/e%20n/ip_22_1113]
in February 2022. Thanks to a reinforced portability right (which
allows individuals to obtain and reuse the personal data they provided
to a company or organisation acting as data controller
[https://commission.europa.eu/law/law-topic/data-protection/reform/rules-business-and-organisations/obligations/controllerprocessor/what-data-controller-or-data-processor_en#:~:text=References-,Answer,it%20is%20the%20data%20controller.]),
the act will give individuals and companies more control over copying
or transferring their data from across different services and devices,
thereby complementing existing legislative provisions. 

On 24 March 2023, a common position on the proposed Data Act was
agreed by the Member States’ representatives (Coreper
[https://www.consilium.europa.eu/en/council-eu/preparatory-bodies/coreper-i/]).
This will allow the Swedish presidency of the Council of the EU
[https://www.consilium.europa.eu/en/press/press-releases/2023/03/24/data-act-member-states-agree-common-position-on-fair-access-to-and-use-of-data/?utm_source=dsms-auto&utm_medium=email&utm_campaign=Data+act%3a+member+states+agree+common+position+on+fair+access+to+and+use+of+data]
to enter negotiations with the European Parliament on the
legislation. 

What exactly does the Data Act mean in the context of competition
law?  What changes will it bring for the data holders, including
public sector data and data.europa.eu? 

COMPETITION LAW: WHAT HAS BEEN DONE UNTIL NOW 

Throughout the past years, EU competition law has been used to
repeatedly tackle a range of anti-competitive data management
practices. The EU can not only establish rules for the correct
functioning of the internal market, but also fine entities not
respecting such rules. 

As of today, two provisions have been particularly important for
tackling anti-competitive practices in the data market. A first
provision entails the ban on anti-competitive agreements, i.e., any
agreements or practices that may affect trade between Member States
and ‘which have as their object or effect the prevention,
restriction or distortion of competition within the internal market’
(article 101 of the Treaty on the Functioning of the European Union
[https://eur-lex.europa.eu/EN/legal-content/summary/treaty-on-the-functioning-of-the-european-union.html#:~:text=The%20Treaty%20on%20the%20Functioning,by%20the%20Treaty%20of%20Maastricht.]
(TFEU)). The second provision refers to the prohibition of any abuse
of dominant position within the internal market (article 102 of the
TFEU).  

However, in this context, the specificity of the data realm presents
new challenges. Following prior jurisprudence (e.g., Microsoft
(T-201/04) [https://curia.europa.eu/juris/liste.jsf?num=T-201/04] and
Huawei (C-170/13)
[https://curia.europa.eu/juris/liste.jsf?num=C-170/13]), the article
102 TFEU is currently interpreted on a case-by-case basis for
questions including, for example, recognition of a dominant position
or market distortion in a non-traditional marketplace such as the data
economy. 

THE DATA ACT AS POTENTIAL GAME CHANGER 

In line with the challenges described above, a set of data-focused
legislative initiatives are materialising at the EU level to
complement present practices and address the changing needs of our
economy. Beside the Digital Services Act
[https://digital-strategy.ec.europa.eu/en/policies/digital-services-act-package],
the Digital Markets Act
[https://ec.europa.eu/commission/presscorner/detail/en/ip_22_6423] and
the Data Governance Act
[https://digital-strategy.ec.europa.eu/en/policies/data-governance-act]
(about which you can read in our August 2022 data story
[https://data.europa.eu/en/publications/datastories/data-portals-and-data-governance-act]),
the proposed Data Act
[https://ec.europa.eu/commission/presscorner/detail/e%20n/ip_22_1113]
is expected to allow a fairer and innovation-friendly competition in
the data sharing economy by introducing measures to: 

 	*
make data generated by using a product (e.g., a digital device) or
related service available to the user of this product or service; 

 	*
ensure fair, reasonable, non-discriminatory and transparent terms and
conditions of data sharing. This means that when making data
available, data holders cannot discriminate against different groups
of data recipients, for example by sharing data of different quality
with their linked enterprises and with non-partners. Moreover, data
holders will have the right to charge data recipients with a
reasonable fee as compensation for the data access, but not for data
collection or production; 

 	*
make it easier to switch between providers of data processing
services; 

 	*
make business-to-government data sharing mandatory, where there is an
exceptional need; and  

 	*
protect non-personal data held by certain service providers in the EU
(e.g., commercially sensitive data, such as trade secrets and other
data subject to confidentiality agreements). 

Until the adoption of the Data Act, both (open) data holders and data
providers should be aware of the present challenges that can be
encountered in data sharing and prepare accordingly for the upcoming
changes. This means, for example, that: 

 	*
Data holders should have a clear understanding of the market (global,
European, or local) in which they are active, or more precisely, which
services they are offering in that market that generate or use
data;  

 	*
Data holders should assess their dominance in the market, i.e., if
alternatives to their data are available and accessible; 

 	*
Data holders should not apply different conditions to data sharing
practices conducted, i.e., avoid discrimination; 

 	*
Data holders should openly consider whether their practices are
enabling fair competition and innovation. 

OUTLOOK FOR DATA HOLDERS AND DATA.EUROPA.EU 

Overall, existing cases of SMEs working with and being positively
impacted by open data are a tangible example of the importance of data
sharing. At the same time, as technology evolves and the needs of our
economy change, new challenges arise in the data sharing environment.
That is why the European Commission proposed the Data Act, which is to
introduce measures to clarify who can create value from data and under
which conditions. 

As described by Thierry Breton
[https://ec.europa.eu/commission/presscorner/detail/en/ip_22_1113],
Commissioner for Internal Market, ‘the Data Act will ensure that
industrial data is shared, stored and processed in full respect of
European rules. It will form the cornerstone of a strong, innovative
and sovereign European digital economy.’ 

On its part, data.europa.eu will monitor changes and evolutions in the
present legislative frameworks related to data sharing, and continue
highlighting new developments and initiatives, especially those
relevant for (open) data holders and data providers. Moreover, it will
continue encouraging the development of interoperable infrastructures
that facilitate open data flows through accessible interfaces, APIs
and open standards. 

Do you want to learn more on the topic of data and fair competition?
Read the full research report on data sharing and competition law
[https://data.europa.eu/sites/default/files/report/Sharing_data_anti_competitively_will_European_data_holders_need_to_change_their_ways_under_the_proposed_new_data_legislation_3.pdf]
and consult our related learning module on data.europa academy
[https://data.europa.eu/en/introduction-intellectual-property-and-competition-law].
Also, don’t miss our next data stories by subscribing to our
newsletter [https://data.europa.eu/en/newsletter] and following
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