Industrial data – the new multi-billion euro business

Companies are making billions off data that provide insights about people. In the age of the “internet of things” they are also gathering other types of data at an increasingly rapid pace. This includes data that cannot be traced back to an individual. Data protection law does not apply in such cases – and neither does any other law. What implications does this have for the new data market?

“Who does the data belong to?” gets about 970 Google hits – an astonishingly low number for an issue that is so important for the future. One example: a machine manufacturer produces a metal-processing machine. The machine has countless sensors that are constantly recording data about the machine’s operating status and its surrounding environment. The machine manufacturer has five suppliers whose products the machine is fitted with. He sells the machine to a company that finances the purchase through a bank – which remains the owner of the machine until the loan has been paid off. The maintenance of the machine is undertaken by a service company that requires access to the data generated by the machine and that outsources part of the job to a subcontractor. Who is allowed to do what with these data?

The new data of Industry 4.0

With the advent of companies such as Google or Facebook, personal data, i.e. data that contain information about a particular person, are now a matter of public interest. The use of these data for purposes such as advertising or checking a person’s credit rating is subject to the relatively stringent rules of data protection law. The principle here is that it is down to individuals to disclose their personal data and allow it to be used by companies. So far, so simple.

Non-personal data, on the other hand, do not receive the same amount of attention. That needs to change. This type of data will become much more significant in the age of Industry 4.0 – also from an economical point of view. If companies managed to get where they are today by sending targeted advertising to consumers, what is the future potential of markets that analyse and monetise “hard” industrial data? Even if only the general contours of these data-driven markets of the future have been established so far, the race for smart services is already on.

New data – a new law?

It makes it all the more interesting that there is no actual law governing who holds the rights to such machine data. Neither Germany’s Civil Code nor its Copyright Act nor its Unfair Competition Act quite fit the bill. That means that no one has the exclusive right to use these data, meaning anyone who happens to have access to such data could use the data themselves, sell the data exclusively to others, or grant several parties rights of use and exploitation.

What comes next? Is it enough for businesses to simply agree on data usage through contractual arrangements? Or do we urgently need a new law? And if we are to pass a new law, who should own the rights to these data? The example above shows that there are many parties with a legitimate interest in this huge data market. So many that the number 970 comes as quite a surprise.