Prepare for the Data Legislation?
The Data Act, a crucial part of the regulatory framework governing data management and protection, is set to revolutionise the data processing services market. The new legislation, published on August 13, 2025, introduces key requirements and implementation measures for providers of data processing services to facilitate customer switching, with the enforcement beginning on September 12, 2025.
The aim of the Data Act is to promote competition and customer choice in the market. A complete ban on switching charges will be enforced from January 12, 2027, preventing providers from charging any switching costs. This ban, along with other measures, is intended to make it easier for customers to switch providers, thereby fostering a more competitive market.
By September 12, 2025, data processing service providers must have updated contracts, technical infrastructure, and transparency measures in place to fully facilitate customer switching rights under the Data Act. Contracts must include specific clauses on switching, deadlines, and data transfer methods, ensuring customers' rights to switch providers, including for existing contracts.
Providers must also establish technical means such as interfaces enabling data transfer, ensure compatibility with interoperability standards, and allow export of data in structured, commonly used, machine-readable formats. The source provider is responsible for delivering data to a machine-readable format for extraction, while the customer and destination provider handle data upload.
During a transition period starting September 12, 2025, until January 12, 2027, switching charges can only cover actual switching costs. From January 12, 2027, all switching charges are banned, though early termination penalties are still allowed.
Providers must publish clear information on switching procedures, maintain online registers with details about data structures and formats, and disclose infrastructure jurisdiction and applicable government anti-access measures. They must also comply with new fairness requirements in contracts and pre-contractual information disclosures to customers regarding switching rights and procedures.
It is necessary to review existing services and contracts in preparation for the Data Act's enforcement. Technical changes may need to be planned to ensure compliance with the Data Act's requirements. The Data Act does not specify the exact methods for data transfer between providers.
The Data Act does not address the consequences for providers who fail to comply with the new requirements before the enforcement date (September 12, 2025). However, it is expected that non-compliance may lead to penalties or legal action.
In summary, the Data Act is a significant step towards promoting competition and customer choice in the data processing services market. By facilitating customer switching, it encourages providers to offer better services and fairer terms, ultimately benefiting consumers. As the enforcement date approaches, providers are encouraged to review their contracts and technical infrastructure to ensure compliance with the new requirements.
Technology and data-and-cloud-computing sectors are expected to be significantly impacted by the Data Act, as providers of data processing services are mandated to adapt their contracts, technical infrastructure, and transparency measures, in line with the requirements of the legislation. The new system aims to foster competition and customer choice, with a complete ban on switching charges from January 12, 2027.
