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European Union

EU's Data Act: New Fairness Regime for Data Licensing Contracts

Strategic Insights

— 1 min read

The European Union's Data Act is set to introduce a new fairness regime governing contracts related to access to and use of data in business-to-business agreements. This new framework sets limitations on when and how certain terms can be imposed, and prohibits unfair contractual terms in data-sharing agreements. A clause is considered unfair if it significantly deviates from established principles of good commercial practice regarding data access and use, thereby breaching the standards of good faith and fair dealing.

Key Takeaways:

  • The Data Act introduces a new framework for data licensing contracts, setting limitations on when and how certain terms can be imposed.
  • A clause is considered unfair if it significantly deviates from established principles of good commercial practice regarding data access and use.
  • The legislation distinguishes between two categories of unfair clauses: Blacklist and Greylist.
  • Blacklist clauses are automatically deemed unfair, while Greylist clauses are presumed unfair unless proven otherwise.
  • Contract terms are considered unilaterally imposed if they are drafted and provided solely by one party without affording the other party a genuine opportunity to influence or negotiate their content.
  • The burden of proof lies with the party that proposed the clause, which must demonstrate that it was not unilaterally imposed.
  • Key protections and limitations include:

* No reliance on unfair clauses: A party that introduces a contested clause cannot rely on it to justify its application if it is ultimately deemed unfair.

* Severability: Where an unfair clause is severable, the remainder of the contract remains valid and enforceable.

* Scope limitations: These protections do not extend to contractual terms that define the main subject matter of the contract or establish the adequacy of the price in relation to the data provided.

  • The Data Act prohibits companies from excluding, modifying, or circumventing the application of these safeguards.

Statistics:

  • By the time the EU's Data Act comes into effect, business-to-business data-sharing agreements will be subject to a new fairness regime.
  • The legislation distinguishes between two categories of unfair clauses: Blacklist and Greylist.
  • By implementing these changes, the Data Act aims to promote greater transparency and fairness in data licensing contracts.
  • According to the Data Act, contract terms are considered unilaterally imposed if they are drafted and provided solely by one party without affording the other party a genuine opportunity to influence or negotiate their content.

Sources:

  • EU Data Act (Regulation (EU) 2023/2854)

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