Data Act

The ability of customers of data processing services, including cloud and edge services, to switch from one data processing service to another while maintaining a minimum functionality of service and without downtime of services, or to use the services of several providers simultaneously without undue obstacles and data transfer costs, is a key condition for a more competitive market with lower entry barriers for new providers of data processing services, and for ensuring further resilience for the users of those services. Customers benefiting from free-tier offerings should also benefit from the provisions for switching that are laid down in this Regulation, so that those offerings do not result in a lock-in situation for customers.

Regulation (EU) 2018/1807 of the European Parliament and of the Council⁽¹⁾ encourages providers of data processing services to develop and effectively implement self-regulatory codes of conduct covering best practices for, inter alia, facilitating the switching of providers of data processing services and the porting of data. Given the limited uptake of the self-regulatory frameworks developed in response, and the general unavailability of open standards and interfaces, it is necessary to adopt a set of minimum regulatory obligations for providers of data processing services to eliminate pre-commercial, commercial, technical, contractual and organisational obstacles, which are not limited to reduced speed of data transfer at the customer’s exit, which hamper effective switching between data processing services.

^{(1) Regulation (EU) 2018/1807 of the European Parliament and of the Council of 14 November 2018 on a framework for the free flow of non-personal data in the European Union (OJ L 303, 28.11.2018, p. 59).}

Providers of data processing services should also be required to remove existing obstacles and not impose new ones, including for customers wishing to switch to an on-premises ICT infrastructure. Obstacles can, inter alia, be of a pre-commercial, commercial, technical, contractual or organisational nature. Providers of data processing services should also be required to remove obstacles to unbundling a specific individual service from other data processing services provided under a contract and make the relevant service available for switching, in the absence of major and demonstrated technical obstacles that prevent such unbundling.

Throughout the switching process, a high level of security should be maintained. This means that the source provider of data processing services should extend the level of security to which it committed for the service to all technical arrangements for which such provider is responsible during the switching process, such as network connections or physical devices. Existing rights relating to the termination of contracts, including those introduced by Regulation (EU) 2016/679 and Directive (EU) 2019/770 of the European Parliament and of the Council⁽¹⁾ should not be affected. This Regulation should not be understood to prevent a provider of data processing services from providing to customers new and improved services, features and functionalities or from competing with other providers of data processing services on that basis.

^{(1) Directive (EU) 2019/770 of the European Parliament and of the Council of 20 May 2019 on certain aspects concerning contracts for the supply of digital content and digital services (OJ L 136, 22.5.2019, p. 1).}

This Regulation aims to facilitate switching between data processing services, which encompasses conditions and actions that are necessary for a customer to terminate a contract for a data processing service, to conclude one or more new contracts with different providers of data processing services, to port its exportable data and digital assets, and where applicable, benefit from functional equivalence.

Undermining the extraction of the exportable data that belongs to the customer from the source provider of data processing services can impede the restoration of the service functionalities in the infrastructure of the destination provider of data processing services. In order to facilitate the customer’s exit strategy, avoid unnecessary and burdensome tasks and to ensure that the customer does not lose any of their data as a consequence of the switching process, the source provider of data processing services should inform the customer in advance of the scope of the data that can be exported once that customer decides to switch to a different service provided by a different provider of data processing services or to move to an on-premises ICT infrastructure. The scope of exportable data should include, at a minimum, input and output data, including metadata, directly or indirectly generated, or cogenerated, by the customer’s use of the data processing service, excluding any assets or data of the provider of data processing services or a third party. The exportable data should exclude any assets or data of the provider of data processing services or of the third party that are protected by intellectual property rights or constituting trade secrets of that provider or of that third party, or data related to the integrity and security of the service, the export of which will expose the providers of data processing services to cybersecurity vulnerabilities. Those exemptions should not impede or delay the switching process.

Switching is a customer-driven operation consisting of several steps, including data extraction, which refers to the downloading of data from the ecosystem of the source provider of data processing services; transformation, where the data is structured in a way that does not match the schema of the target location; and the uploading of the data in a new destination location. In a specific situation outlined in this Regulation, unbundling of a particular service from the contract and moving it to a different provider should also be considered to be switching. The switching process is sometimes managed on behalf of the customer by a third-party entity. Accordingly, all rights and obligations of the customer established by this Regulation, including the obligation to cooperate in good faith, should be understood to apply to such a third-party entity in those circumstances. Providers of data processing services and customers have different levels of responsibilities, depending on the steps of the process referred to. For instance, the source provider of data processing services is responsible for extracting the data to a machine-readable format, but it is the customer and the destination provider of data processing services who are to upload the data to the new environment, unless a specific professional transition service has been obtained. A customer who intends to exercise rights related to switching, which are provided for in this Regulation, should inform the source provider of data processing services of the decision to either switch to a different provider of data processing services, switch to an on-premises ICT infrastructure or to delete that customer’s assets and erase its exportable data.

Data processing services are used across sectors and vary in complexity and service type. This is an important consideration with regard to the porting process and timeframes. Nonetheless, an extension of the transitional period on the grounds of technical unfeasibility to allow the finalisation of the switching process in the given timeframe should be invoked only in duly justified cases. The burden of proof in that regard should fall fully on the provider of the data processing service concerned. This is without prejudice to the exclusive right of the customer to extend the transitional period once for a period that the customer considers to be more appropriate for its own purposes. The customer may evoke that right to an extension prior to or during the transitional period, taking into account that the contract remains applicable during the transitional period.

To facilitate interoperability and switching between data processing services, users and providers of data processing services should consider the use of implementation and compliance tools, in particular those published by the Commission in the form of an EU Cloud Rulebook and a Guidance on public procurement of data processing services. In particular, standard contractual clauses are beneficial because they increase confidence in data processing services, create a more balanced relationship between users and providers of data processing services and improve legal certainty with regard to the conditions that apply for switching to other data processing services. In that context, users and providers of data processing services should consider the use of standard contractual clauses or other self-regulatory compliance tools provided that they fully comply with this Regulation, developed by relevant bodies or expert groups established under Union law.

The information to be provided by providers of data processing services to the customer could support the customer’s exit strategy. That information should include procedures for initiating switching from the data processing service; the machine-readable data formats to which the user’s data can be exported; the tools intended to export data, including open interfaces as well as information on compatibility with harmonised standards or common specifications based on open interoperability specifications; information on known technical restrictions and limitations that could have an impact on the switching process; and the estimated time necessary to complete the switching process.

In order to facilitate switching between data processing services, all parties involved, including both source and destination providers of data processing services, should cooperate in good faith to make the switching process effective, enable the secure and timely transfer of necessary data in a commonly used, machine-readable format, and by means of open interfaces, while avoiding service disruptions and maintaining continuity of the service.

Switching charges are charges imposed by providers of data processing services on the customers for the switching process. Typically, those charges are intended to pass on costs which the source provider of data processing services may incur because of the switching process to the customer who wishes to switch. Common examples of switching charges are costs related to the transit of data from one provider of data processing services to another or to an on-premises ICT infrastructure (data egress charges) or the costs incurred for specific support actions during the switching process. Unnecessarily high data egress charges and other unjustified charges unrelated to actual switching costs inhibit customers from switching, restrict the free flow of data, have the potential to limit competition and cause lock-in effects for the customers by reducing incentives to choose a different or additional service provider. Switching charges should therefore be abolished after three years from the date of entry into force of this Regulation. Providers of data processing services should be able to impose reduced switching charges up to that date.

A source provider of data processing services should be able to outsource certain tasks and compensate third-party entities in order to comply with the obligations provided for in this Regulation. A customer should not bear the costs arising from the outsourcing of services concluded by the source provider of data processing services during the switching process and such costs should be considered to be unjustified unless they cover work undertaken by the provider of data processing services at the customer’s request for additional support in the switching process which goes beyond the switching obligations of the provider as expressly provided for in this Regulation. Nothing in this Regulation prevents a customer from compensating third-party entities for support in the migration process or parties from agreeing on contracts for data processing services of a fixed duration, including proportionate early termination penalties to cover the early termination of such contracts, in accordance with Union or national law. In order to foster competition, the gradual withdrawal of the charges associated with switching between different providers of data processing services should specifically include data egress charges imposed by a provider of data processing services on a customer. Standard service fees for the provision of the data processing services themselves are not switching charges. Those standard service fees are not subject to withdrawal and remain applicable until the contract for the provision of the relevant services ceases to apply. This Regulation allows the customer to request the provision of additional services that go beyond the provider’s switching obligations under this Regulation. Those additional services, can be performed and charged for by the provider when they are performed at the customer’s request and the customer agrees to the price of those services in advance.

In order to take account of technical aspects of data processing services, the power to adopt acts in accordance with Article 290 TFEU should be delegated to the Commission in respect of supplementing this Regulation in order to establish a monitoring mechanism on switching charges imposed by providers of data processing services on the market, and to further specify the essential requirements in respect of interoperability for participants in data spaces that offer data or data services to other participants. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level, and that those consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making⁽¹⁾. In particular, to ensure equal participation in the preparation of delegated acts, the European Parliament and the Council receive all documents at the same time as Member States’ experts, and their experts systematically have access to meetings of Commission expert groups dealing with the preparation of delegated acts.

^{(1) OJ L 123, 12.5.2016, p. 1.}

Data processing services which concern services of which the majority of main features has been custom-built to respond to the specific demands of an individual customer or where all components have been developed for the purposes of an individual customer should be exempted from some of the obligations applicable to data processing service switching. This should not include services which the provider of data processing services offers at a broad commercial scale via its service catalogue. It is among the obligations of the provider of data processing services to duly inform prospective customers of such services, prior to the conclusion of a contract, of the obligations laid down in this Regulation that do not apply to the relevant services. Nothing prevents the provider of data processing services from eventually deploying such services at scale, in which case that provider would have to comply with all obligations for switching laid down in this Regulation.