EU Receives Criticisms from SAP, Siemens on Data Act Draft Before Adopted as Legislation

German companies have joined tech giants in criticizing the European Union's draft for Data Act before it can be adopted as legislation. This aims to curb the power of tech companies in the United States to help the EU to achieve its digital and green efforts.

Criticizing EU's Data Act

As EU countries and EU lawmakers work on the details of the Data Act that was proposed last year by the European Commission, Reuters reported that German business software maker SAP and German engineering company Siemens criticized the draft on the use of data generated by smartphones and other consumer goods.

According to a joint letter sent to Commission President Ursula von der Leyen, EU Antitrust Chief Margrethe Vestagerm, and EU Industriel Chief Thierry Breton, a provision forcing companies to share data with third parties could put trade secrets at risk just to provide aftermarket or other data-driven services.

"This could do lasting damage to the competitiveness of some of Europe's most successful companies employing millions of people. Furthermore, we believe it could pose serious risks to cyber security and safety," the statement added.

When passed, companies from the European region will have to disclose data to third-country competitors in accordance with the legislation. This breaks the backbone of future data-driven European business models, with a minor assurance of what comes next.

The letter consists of signatories from the chief executives of the German companies, Siemens Healthineers, Germany-based medical technology company Brainlab, software company DATEV, and lobbying digital group DIGITALEUROPE.

Through this letter, Financial Times reported that these companies aim for safeguards to allow them to refuse requests to share data to prevent trade secrets, cybersecurity, health, and safety at risk with the scope of devices in the legislation should not be expanded.

Additionally, they requested for the legislation to preserve contractual freedom to allow customers and providers to agree on contracts that work for both parties, in regards to a rule that allows the customers to switch between different cloud providers.

Digital Act

The draft law that covers EU consumer and corporate data is part of a set of legislations to curb the power of US tech giants in order to help the EU to achieve its objectives when it comes to digital and green efforts.

Wall Street Journal reported this will force companies to strike data-sharing deals to allow consumers between competing service providers when using connected devices. Many of the regulations under this law would apply mostly to just big tech companies, hence why they are the most affected by this. Companies argue that the proposed law is too restrictive.