Modern vehicles have connectivity functions for remote access to data such as door lock status, location, and fuel efficiency. Original equipment manufacturers (OEMs) design and manage these features to ensure safety and security.
Some aftermarket providers claim that OEMs unduly restrict access to in-vehicle data[1], allegedly resulting in under development of data-driven services and an unlevel playing field where data are used by OEMs own aftermarket services to gain an unfair competitive advantage against independent firms.
Against this backdrop, in 2022 the European Commission opened a public consultation to assess the need for sector-specific regulation on in-vehicle data access, functions, and resources, in addition to the Data Act coming into force in 2025.
This study assesses the presence of alleged market failures related to access to in-vehicle data. The report focuses on access to data and not access to function or resources.
1. OEMs have incentives to provide access to in-vehicle data, particularly for commercial vehicles
Based on economic theory, any risk of restricting access of in-vehicle data to the aftermarket would depend on two conditions affecting OEMs incentives: a) the link between aftermarket and primary market of selling vehicles and b) the level of competition in the primary market. OEMs would not have an incentive to degrade the quality of aftermarket services, for example by undersupplying data to third-party providers, if that would affect their competitive offering and position in the primary market of selling vehicles (i.e., aftermarkets and primary markets are interdependent and function as a ‘system’). Insofar as any restrictions to the provision of data would jeopardise sales in the primary market, competition in primary markets would discipline OEMs.
While competition among OEMs is strong, we find that the importance of aftermarkets may vary between private and commercial vehicles. For commercial vehicles, the quality and costs of aftermarket services feature heavily in the buying decision. For private vehicles, there is not sufficient evidence to conclude that competition in primary markets disciplines aftermarket services. Specifically (at least at present) private consumers may find it difficult to factor in aftermarket services in their car-purchase decisions.
2. Evidence of market outcomes is not consistent with market failure in access to in-vehicle data
On the supply side, we find that OEMs provide third parties with data on vehicle location, health, and driver behaviour to develop aftermarket services. Data availability varies across OEMs brands and is higher especially for heavy duties vehicles. Vehicle data is also available from non-OEM sources such as external dongles and smartphones, and there are more than 15 existing regulations that already cover in-vehicle data access and sharing. On the demand side, we observe strong adoption of data services in commercial vehicles, driven by demand for services essential to the customer’s business, such as fleet management solutions, while the current limited take-up of data services for private customers appears to be driven by consumer preferences rather than the undersupply of data.
We further examined four aftermarket services commonly referenced in policy discussions as use cases for in-vehicle data: predictive repair and maintenance, usage-based insurance (UBI), fleet management services, and electromobility services. We find that differences in the availability of data-driven services more likely driven by customer demand than access to data.
3. Newly introduced regulations will further regulate access to in-vehicle data
A number of recently introduced regulations are likely to provide further safeguards to pre-empt market failures that could in theory emerge with respect to in-vehicle data.
The Data Act (effective in 2025) mandates access to raw and pre-processed data generated by connected vehicles under fair, reasonable and non-discriminatory (FRAND) terms. We expect that it would already mitigate any issues related to market failure in access to data from OEMs. It will also mitigate any concerns related to the pricing of data by enforcing FRAND conditions.
Moreover, other EV-specific regulations, such as the Battery Regulation and Renewable Energy Directive, will mandate access to battery and charging data, part of which will most likely be already within the scope of the Data Act. This exemplifies the existing web of current and forthcoming EU regulations governing the sharing and access of in-vehicle data from connected vehicles.
The study is commissioned by the European Automobile Manufacturers’ Association (ACEA).
[1] A related and parallel debate relates to whether or not access should be provided to some of the vehicle’s functionalities (e.g. locking or unlocking doors) or their resources (such as the dashboard).
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