SAP, Siemens Say EU Data Act Endangers Trade Secrets

German tech firms including SAP and Siemens have criticised the EU’s draft data regulations as endangering trade secrets, joining criticisms from US companies.

The EU’s Data Act, which is still being negotiated, seeks to create a framework for the use and transfer of information generated by devices in Europe.

Some of its provisions aim to place limits on the way that companies can transfer information internally across borders, a measure intended to prevent the information from being accessed by foreign governments such as that of the United States.

But the German firms focused on provisions that force companies to share data with third parties to enable them to provide aftermarket or other services.

‘Core know-how’

Those rules could endanger trade secrets such as “core know-how” and design data by forcing their discosure to third parties, the companies said.

“Effectively, this could mean that EU companies will have to disclose data to third-country competitors, notably those not operating in Europe and against which the Data Act’s safeguards would be ineffective,” the companies said in the letter addressed to European Commission President President Ursula von der Leyen, antitrust chief Margrethe Vestager and industry chief Thierry Breton.

The 4 May letter was signed by the chief executives of SAP, Siemens, Siemens Healthineers, German medical tech firm Brainlab, German software firm DATEV and lobbying group Digitaleurope.

The letter asked for safeguards to be implemented to allow firms to refuse requests to share data that would endanger trade secrets, cybersecurity or health and safety, Reuters reported.

Sharing obligation

It also asks for the scope of devices covered by the legislation not to be extended.

The Commission said it is not trying to change European law on trade secrets.

“However, it’s important that trade secrets aren’t used as an excuse for not sharing data,”  Commission spokesman Johannes Bahrke told reporters.

“We have to find the balance there. And that’s exactly what we’re trying to do with the proposal on the Data Act. There are safeguards, so contractual and technical protections laid out in the Data Act,” he said.

The letter called for changes to a provision allowing customers to switch between different cloud providers, saying parties should be able to retain their freedom on agreeing contracts for different business cases.