Study to support an impact assessment for the review of the Database Directive

Access to data and the ability to use it have become an EU policy priority. Data is considered essential for innovation and economic growth in an increasingly data-driven society. Particular attention is given to broadening access to and use of data generated/collected by sensors and machines in the Internet of Things (IoT) environment. As part of the actions to achieve this objective, the European Commission is reviewing the Directive 96/9/EC on the legal protection of databases (“Database Directive”) within the broader Data Act initiative. 

Our latest report for the European Commission, in collaboration with Technopolis, CSIL and Tilburg University, provides a comprehensive impact assessment on the possible review of the Database Directive, with a special focus on the application of the Directive to databases containing sensors and machine-generated data (MGD).

The Database Directive aims to promote the production of databases in the EU by granting an exclusive right, i.e. sui generis right, to database-makers that undertook a substantial investment in obtaining, verifying, or presenting the contents of a database. Currently, there is legal uncertainty around the scope of the Directive, in particular in relation to MGD. Therefore, some aspects of its application are seen as not in line with recent technological developments in the data economy. The legal uncertainty of the sui generis right may create frictions in the market for data with the risk of limiting the access and use of MGD.

Our study presents evidence on the impact of possible policy options for the review of the Database Directive, specifically the sui generis right, to ensure the instrument is fit for the data economy. We focused on four policy options related to machine-generated data (MGD):

• exclusion of MGD from the scope of the sui generis right
• exclusion of MGD from the scope of the sui generis right and substitution of the current infringement test with a more flexible test related to economic detriment
• exclusion of MGD from the scope of the sui generis right and introduction instead of an alternative control mechanism applied only to MGD databases
• inclusion of MGD in the scope of the sui generis

Based on our impact assessment, we conclude the exclusion of MGD from the scope of the sui generis right is the most suitable policy option. This option is expected to:

• bring direct benefit in the reduction of information and transaction costs for database users due to less room for opportunistic litigation on third party data use;
• limit the risk that investments in the generation of raw data rather than databases, as originally envisaged by the Directive, would benefit from exclusive rights;
• present a stronger alignment with the Data Act and the intention to stimulate access and usage of data across sectors (however, the study finds that the inclusion of MGD as structured protection could also incentivise database makers to make their data more public).

The conclusions are based on a comprehensive analysis of the information gathered through extensive desk research, literature review, and a stakeholder consultation including an ad hoc online survey, in-depth interviews and workshops.

The study is commissioned by the European Commission.