For connected cars, an evolving EU regulatory landscape

The European Union is creating an ambitious new regulatory framework for data and artificial intelligence with major implications for the automotive sector. This would affect not only vehicle manufacturers but also automotive suppliers and distributors, and providers of related products and services, ranging from telecommunications, entertainment, insurance, fuel/charging stations and aftermarket services. 

The new framework will include, in particular, the recently proposed Data Act. This sets out overall principles for data access to connected products, introducing user rights to access and share data, contractual principles for business-to-business data exchange, and switching principles for cloud services.

According to the European Commission, however, the Data Act may not go into sufficient detail for the provision of data-dependent services in the automotive sector.

With that in mind in March the commission opened a consultation on potential sectoral rules for vehicle data. 

The EU’s data initiatives will affect stakeholders’ ability to develop new functions and services that depend on the availability of data.  These new functions could include, for example, the possibility of remotely unlocking a vehicle’s door for a shared mobility service; displaying speed limit information on the dashboard for navigation services; or displaying information about charging or discharging a car’s battery for electric vehicle-related services.

The commission is considering three broad policy options. The least intrusive -- short of doing nothing -- would be to impose equal access rights to in-vehicle data, without regulating the data to be collected. Under the second option, the EU would require the availability of a minimum list of data, functions and resources, remotely and in a specific format. The third option would also include governance rules on access. From the European Commission’s perspective, more extensive obligations would offer greater benefits but also potentially greater costs and risk of delay.

Which approach the EU chooses will have significant implications for stakeholders. For example, under the first option, manufacturers’ freedom to decide what data their vehicles collect could limit third parties’ ability to use such data, for example to offer services across multiple brands. 

Under the second option, manufacturers would need to publish lists of vehicle data, functions and resources accessible on a specific model or version of a vehicle - possibly facilitating services offered to owners of different vehicle brands while addressing governmental bodies’ data needs for monitoring traffic, CO2 or pollutant emissions, or vehicle safety.

And imposing uniform data access governance rules could further promote such access and ultimately create a more level playing field and greater incentives for investment. 

The consultation will run until June 21, and the commission is expected to publish its conclusions in late summer. Meanwhile, the commission is also conducting consultations on antitrust rules applicable to the collection and sharing of data among (actual and potential) competitors. The commission recently published draft general antitrust guidelines for the assessment of data sharing and pooling, among other things, which will most likely apply from 2023 to 2033. The Commission’s motor vehicle block exemption regulation is also under review, with a replacement block exemption with specific rules for in-vehicle data sharing from mid-2023 to 2028.

As in many sectors, EU regulation is likely to cascade into other jurisdictions. The commission’s consultations thus offer a precious opportunity for stakeholders to influence the future regulatory landscape.

The new regulatory framework will complement EU antitrust rules.  The commission has previously imposed conditions under antitrust rules on access to application protocol interfaces (APIs) and integrator apps in connection with mobility services such as car sharing, ride hailing, parking services and electric vehicle charging.