The race for car data: EU redefines access to information with Data Act and MVBER

Access to data is the key to success in automobile industry. Thomas G. Funke, co-head of the international competition practice at Osborne Clarke, and Elisabeth Macher, counsel in the intellectual property practice, analyze how EU law requires vehicle manufacturers to provide essential information to aftermarket operators, and enhanced data-sharing requirements will pave the way towards innovation and sustainable competition.

Posté le Monday, March 21st 2022
The race for car data: EU redefines access to information with Data Act and MVBER

Data access is the key to automotive success. EU law requires vehicle manufacturers to license essential information to aftermarket operators, and enhanced data sharing requirements will pave the way towards innovation and sustainable competition.

In the 21st century, innovation is almost exclusively data driven. Calculating insurance premiums based on an individual’s driving patterns, predicting maintenance requirements or directing vehicles to parking spaces in smart cities, all require reams of data. Even the identification of suitable spare parts requires access to information. However, vehicle manufacturers exploring new business models or trying to maintain their margins in the multi-billion repair and spare parts market, may not be interested in sharing data with third parties. Nevertheless, EU law requires vehicle manufacturers to provide essential information to aftermarket operators and grant them access to the vehicle data stream.

These principles from Regulation (EU) 2018/8581 are subject to dispute. The European Court of Justice (CJEU) is currently engaging with a preliminary reference from a German court to determine to what extent vehicle manufacturers must grant access to information, and how “reasonable and proportionate” fees for such access are defined (Case C-390/21)2. Disputes also loom over the format such information should be made available in for aftermarket operators, in order to process it properly, as well as the legality of installation codes for spare parts and other technical barriers3. Additional differences concern access to machine-generated or user-generated data, i.e., the vehicle data stream including sensor data. Courts and competition authorities will soon have to decide which measures are indispensable for safety and (cyber-) security, and which are disproportionate barriers to competition.

The EU Data Act

 

The EU Data Act aims to facilitate access to user-generated data across sectors and promote competition by breaking the manufacturer’s grip on data.

While existing Type Approval law focuses mainly on static data such as repair and maintenance information, the proposed Data Act addresses user-generated data. The Data Act concerns all connected products (such as connected cars), as well as related services, including software and virtual assistants. When someone generates data by using a product, the manufacturer will be under an obligation to make related data accessible to the user, be it a natural person or a legal entity. This would apply to a driver who, by driving the car, generates data in a vehicle sensor.

Primarily, the manufacturer should design the product (or provide the service), in such a manner that data generated by their use are, “by default, easily, securely and, where relevant and appropriate, directly accessible to the user” (Art. 3(1) of the draft Data Act (DA)). Where that is not possible, the manufacturer or other data holder must make the data available to the user on request and “without undue delay, free of charge and, where applicable, continuously and in real-time” (Art. 4(1) DA).

The manufacturer must also share the data with third parties – including competitors – should this be requested by the user. In the automotive sector, third parties might be repair shops, insurers, or in-car entertainment services providers. While they may be prohibited from using the data to develop products that compete with the product that generated the data, the draft Recital 28 encourages the development of “new, innovative products- and related services”.

Manufacturers or other data holders may demand “reasonable” compensation from third-party recipients for granting access to their data (Art. 9(1) DA). While established FRAND principles might apply, this requirement could result in similar controversies as the one currently before the CJEU with regard to type approval law. In the case of SMEs as data recipients, payable compensation must not exceed the costs directly related to making the data available (Art. 9(2) DA). The data holder must disclose the basis of its calculation so that the data recipient can verify that the described requirements are met (Art. 9(4) DA).

At present, the European Parliament and the Council are discussing the Commission’s Data Act proposal of February 23rd 20224. In parallel, the Commission is seeking input from market participants in the automotive sector with a view to creating sector-specific rules that will complement the Data Act.

The Motor Vehicle Block Exemption

 

The sector-specific competition framework consisting of the Motor Vehicle Block Exemption Regulation5 ("MVBER") and the Supplementary Guidelines6 already provides that data ultimately needed for repair or maintenance should be available to multi-brand repairers, roadside assistance providers, equipment manufacturers and other independent aftermarket operators. Whether independents should receive comprehensive databases or merely piecemeal access remains just as controversial as the calculation of fair, reasonable and non-discriminatory licensing fees.

The Commission is in the process of overhauling the present rules, which would otherwise expire in 2023. It appears likely that the Commission will renew the Regulation for five years, and update the Supplementary Guidelines in view of recent technological advances.

In particular, the Commission intends to update its guidance on access to information. Industry stakeholders and EU member-states stress that information access continues to be key to innovation and effective competition at all levels of the automotive aftermarket. Remote diagnostic data and parts activation codes are among the novel issues that the legislator is being asked to shed light on.

The road ahead

 

Going forward, enhanced data-sharing requirements in draft legislation will pave the way towards innovation and sustainable competition.

Connected, autonomous and electrically powered vehicles have enormous potential, but can only provide the full benefit to consumers where the legal framework protects innovation and competition across all markets, from diagnostic equipment to emissions testing, spare parts and accident repair to motor insurance, fleet management or app development.

1 Regulation (EU) 2018/858 of the European Parliament and of the Council of 30 May 2018 on the approval and market surveillance of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles, OJ L 151, 14.6.2018, p. 1–218.

2 Case C-390/21 - ADPA and Gesamtverband Autoteile-Handel. In the interest of full disclosure, the authors represent parties in this litigation.

3 Identified as an issue by the European Commission in its evaluation of the Motor Vehicles Block Exemption Regulation (MVBER), see https://ec.europa.eu/competition/sectors/motor_vehicles/legislation/mvber_contributions_factual_summary.pdf).

4Proposal for a Regulation of the European Parliament and of the Council on harmonised rules on fair access to and use of data (Data Act), COM(2022) 68 final.

5 Commission Regulation (EU) No 461/2010 of 27 May 2010 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices in the motor vehicle sector, OJ L 129, 28.5.2010, p. 52–57.

Commission Notice — Supplementary guidelines on vertical restraints in agreements for the sale and repair of motor vehicles and for the distribution of spare parts for motor vehicles, OJ C 138, 28.5.2010, p. 16–27.

ABOUT THE AUTHORS

Dr. Thomas G. Funke, LL.M. is the co-head of the international competition practice at Osborne Clarke. He advises on antitrust litigation, cartel investigations and merger control. In the European Court of Justice and the German Supreme Court, Thomas secured decisions in Hydrogen Peroxide (C-352/13), Akzo v Commission (T-345/12), CDC v Commission (T-437/08) and the BGH Coffee Roaster litigation. The European Commission retained Thomas to defend its E.ON/Innogy and RWE/E.ON merger clearances in the General Court of the European Union. Thomas has been recognised as a leading expert for the EU competition framework for the motor vehicle sector. He has led international projects involving the MVBER, telematics and the connected car.

Elisabeth Macher, LL.M. is a counsel in Osborne Clarke’s intellectual property practice, with a focus on the automotive sector. She advises automotive aftermarket clients (suppliers, parts dealers, data publishers), including associations. She also gained valuable in-house experience spending a secondment in the legal department of one of the world’s largest automotive suppliers.