newtech.law - legal aspects of new technologies

The EU’s Data Act introduces important rules for performance of data processing services. Given their importance for businesses, these rules deserve to be discussed in a separate article. Here we examine more closely the definition of “data processing services” in the Data Act. We attempt to outline what types of services may, in practice, be covered by the new regulations, and how it should be determined whether a given service constitutes a data processing service for purposes of the Data Act.

Legal definition

Under the Data Act (Regulation (EU) 2023/2854), “data processing service” is defined as “a digital service that is provided to a customer and that enables ubiquitous and on-demand network access to a shared pool of configurable, scalable and elastic computing resources of a centralised, distributed or highly distributed nature that can be rapidly provisioned and released with minimal management effort or service provider interaction.”

One of the main new institutions introduced by the EU’s Data Act is the user’s right to access data (including metadata necessary to interpret or use the data) derived from a connected product the person is using or a service related to a connected product.

The data which a user can access may have significant commercial value for the data holder (e.g. the manufacturer of a connected product). Therefore, it may be crucial from the data holder’s perspective to ensure that such data remain undisclosed, or that use of the data be restricted.

The internet of things and related services is one of the key industries affected by the EU’s Data Act. Businesses in this sector may have to make changes to bring their operations into compliance with the new requirements. In this article we examine the key obligations under the Data Act for IoT companies, and their operational implications.

Pre-contractual information obligations

What do these duties involve?

Entities that sell, rent or lease a connected product are required to provide at least the following information before entering into a contract with users:

• What data can be generated by the connected product (type, format, and estimated volume of data)
• Whether the connected product is capable of generating data continuously and in real time
• Whether the connected product is capable of storing data on the device or on a remote server, including, where applicable, the intended duration of data retention
• How the user may access, retrieve or, where relevant, erase the data, including the technical means to do so, as well as their terms of use and quality of service.

The Data Act became applicable on 12 September 2025. What do businesses need to pay attention to under this new EU-wide regulation?

Nature and purpose of the Data Act

The Data Act—Regulation (EU) 2023/2854 of the European Parliament and of the Council of 13 December 2023 on harmonised rules on fair access to and use of data and amending Regulation (EU) 2017/2394 and Directive (EU) 2020/1828 (Data Act)—is an EU regulation, and as such applies directly in Poland and all other EU member states. At the national level the Data Act will be supplemented by local regulations, but these will essentially govern only procedural issues (e.g. infringement proceedings), not substantive issues. In other words, substantively the Data Act will govern across the entire EU.

To maintain the essential balance, I suggest sometimes taking a sceptical look at the tech rapture which we are increasingly swept up in. Then we will grasp that investing unheard-of amounts in the growth of AI and other digital technologies is not our most pressing need now.

For some time I’ve been bothered by the Solow paradox. This is the entirely counterintuitive connection observed since the 1980s between the growth of digital technologies and productivity. The economic data for the last 40 years show that the most advanced economies have not achieved a significant growth in productivity, despite the spread of computers, the internet, and various digital tools. Indeed, the productivity indicators during this period have been clearly lower than in periods preceding the digital revolution.

In its lofty aims and declarations, the EU’s Artificial Intelligence Act clearly calls for human oversight of AI systems. But drilling down to the particular duties of entities using AI systems, the AI Act isn’t so clear. This article seeks to outline the key challenges in this context facing providers and users of AI systems.