Article source: Simmons & Simmons Law
The way businesses handle data in the European Union is changing. The European Data Act is one of the biggest reasons why. It introduces new rules about who can access data, how data can be shared, and what rights users have.
If your business operates in the EU or works with EU customers, this law matters to you, with most rules taking effect on 12 September 2025. Even if data is not your main product, it still has an important role in your operations. Understanding the impact early can help you avoid problems later.
Let’s do that without further ado.
What the European Data Act Is About
The European Data Act is designed to make data more accessible and fair. It focuses on data generated by connected products and digital services. This includes things like smart devices, machines, and software platforms.
The goal is to give users more control over the data they help create. It also aims to reduce unfair data practices and improve competition across the EU.
Unlike GDPR (General Data Protection Regulation), which focuses on personal data and privacy, this law is more about access and usage. It covers both personal and non-personal data. That means many businesses will be affected.
How It Changes Data Access Rights
One major change is who gets access to data. Under the European Data Act, users have the right to access data generated by the products they use. In many cases, they can also share that data with third parties.
For businesses, this means less exclusive control over certain datasets. If your company collects data through connected products, you may need to provide it when requested.
You must also make sure the data is shared in a clear and usable format. This adds new responsibilities to how data systems are designed and managed.
What It Means for Product and Service Providers
If you sell smart products or digital services, this law has a direct impact. You will need to design systems that allow data access from the start. This is often called “data access by design.”
You also need to be transparent. Customers must know what data is collected, how it is used, and how they can access it. This information should be easy to understand.
For many businesses, this will require changes to contracts, terms of service, and internal processes. It may also affect how products are built in the future.
New Rules Around Data Sharing With Third Parties
The European Data Act allows users to share their data with third parties of their choice. This could include competitors, service partners, or analytics providers.
Businesses cannot block this sharing without a valid reason. They also cannot use unfair contract terms to limit access. This helps smaller companies compete and innovate.
However, the law does include protections. Trade secrets must still be respected. Businesses can take reasonable steps to protect sensitive information while complying with requests.
Impact on Cloud and Digital Service Providers
Cloud providers and digital platforms face specific obligations. The law makes it easier for customers to switch providers. This reduces vendor lock-in and increases competition.
Service providers must remove unnecessary barriers to switching. They must also support data portability in a practical way. Over time, this could change pricing models and service structures.
For businesses using cloud services, this can be a positive change. It gives more flexibility and bargaining power.
Compliance Costs and Operational Changes
Like most regulations, the European Data Act comes with costs. Businesses may need to invest in new systems, staff training, and legal reviews.
Data management processes will need updates. Customer support teams must be ready to handle access requests. IT systems must support secure and timely data sharing.
While this can feel like a burden, early preparation helps reduce long-term costs. Companies that adapt early often gain trust and efficiency.
Opportunities Hidden in the Regulation
Not everything about the European Data Act is restrictive. It also creates new opportunities. Easier data sharing can lead to new services, partnerships, and business models. Companies that focus on transparency and user control may stand out in the market. Trust becomes a competitive advantage.
There is also room for innovation. Businesses can build tools that help others manage, share, or analyze data in compliant ways.
Steps Businesses Should Take Now
The first step is awareness. Companies will have to make sure leadership teams understand the law and its scope.
Next, map your data. Know what data you collect, where it comes from, and how it is used. As a business, you will also have to review contracts and policies. Look for areas that may conflict with the new rules and update your policies.
Finally, plan for technical changes. Data access and portability should not be an afterthought, as the obligation to make connected products or services available to users applies from September 2026.
Legal Disclaimer: Please be advised this article is for informational purposes only and should not be used as a substitute for advice from a trained legal professional. Please seek the advice of a legal professional if you’re facing issues regarding the European Data Act.
