A vital question: Who owns the data?

Hardly any other topic relating to digitalization is more controversially discussed than the topic of “data sovereignty”. Applicable laws do not provide clear answers. For this reason, the EU Commission is considering a unified “Data Code.” Contractual solutions offer good options for taking steps toward practical implementation. Digital data are becoming an ever more important means of production. Not only do they offer new opportunities for optimizing processes and assuring quality during the creation of goods and services. Digital data also make new and innovative achievements possible, for example offerings tailored specifically to the needs of individual clients. This makes questions regarding “data sovereignty” all the more important for a company: Who owns the data? How may digital data be used? What possibilities exist for protecting against use by third parties?

Current laws regulate only subareas and subsets of data. Of course, data privacy protections apply to the handling of personal data that can be tied to specific natural persons. Data privacy protections do not apply from the outset to the large quantity of data that is generated by machines or intelligent objects. Analytical results that can no longer be tied to individuals do not fall within the data privacy protections, either. Other subsets of data can also fall under the protection of special laws, for instance those governing trade and business secrets or design protections. But no comprehensive “data ownership” scheme is provided for under current law.

This situation offers many opportunities to structure rights and obligations in connection with digital data through agreements. The importance of these arrangements continues to rise, because increasing digitalization is leading to ever more intensive data exchanges and ever bigger volumes of data. Hence, the economic importance of a company’s data increases with its potential for analysis and potential uses. It is the deciding factor for data-driven business models, as proven by the striking examples of Google and Facebook.

Conclusion:

SKW Schwarz offers indispensable competence and expertise, not only for legal analysis of databases and ongoing data exchanges, but especially for contractual solutions. These include contractual structuring and arrangements regarding personal data and their further use. From a company perspective, it is best to employ an integrated operation for the handling and the use of data so that the opportunities and potential of digitalization can be tapped in a targeted way.