Self-driving cars – collecting the necessary data and the implications for automotive manufacturers. By Dr. Anette Gärtner

Self-driving cars are no longer a distant dream, but are fast becoming a reality. In the UK, two major car manufacturers are already conducting trials with so-called semi-autonomous vehicles and a third is currently looking for volunteers for what will be the largest trial in the automotive industry.

Semi-autonomous cars are powerful computers on wheels that not only sense their surroundings, but also communicate with their environment and are able to make decisions. Other than the destination, the car needs no input from the driver, who essentially becomes a passenger. That said, if necessary the driver can take control of the car. The new technology is supposed to improve fuel efficiency and the overall driving experience. More importantly, the number of accidents will hopefully be reduced if automated systems hit the brakes in situations of danger, such as a pedestrian suddenly crossing the road.

The new world of self-driving cars, however, requires that a constant stream of data be collected and analysed. A variety of stakeholders want to access that data, including, among others, insurers, licensed garages and car manufacturers. The latter, in particular, have a vested interest in obtaining information stored by the black boxes of self-driving cars, because they need the performance data to improve and further develop their products.

While technology advances, so does the law. Since 2012 there has been a big debate in Germany as to whether the digital economy calls for a new legal framework and, more specifically, the creation of a ‘data ownership’ right. This has led to a whole string of additional questions, such as “How should the data ownership right be delineated?” and “Who should own it?” More recently, the European Commission has joined in the discussion and issued a series of legal and economic papers that address the right to data. The public consultation titled ‘Building the European data economy’ has now ended (26 April 2017), so we are yet to learn of the outcome.

The potential implications for the automotive sector and other manufacturing companies are significant. If owners of self-driving cars enjoyed monopoly rights to data similar to patents, this would imply that car manufacturers need a licence to access and use that data. The creation of a distinct data ownership right would change the framework in which transactions take place. In a survey conducted in 2015 on behalf of the BITKOM association of companies from the digital economy, the majority of car owners aged 29 years and younger indicated that they are prepared to share vehicle data with third parties. They do, however, expect rewards such as rebates on insurance premiums. This shows that, although consumers currently only enjoy a de facto monopoly if and to the extent that they control access to data, they are aware of its economic value. If that de facto monopoly were reinforced with a legal right to data, companies from the car manufacturing industry might find themselves in a situation where they would need to provide consideration for access, in other words a reduction of the purchase price.

In addition, there are more imminent changes to the law. In May 2018, the EU General Data Protection Regulation (GDPR) will come into force. While that piece of legislation does not provide for data ownership, it will introduce the so-called right to portability. According to article 20(1) of the GDPR, “the data subject shall have the right to receive the personal data concerning him or her, which he or she has provided to a controller, in a structured, commonly used and machine-readable format and have the right to transmit those data to another controller without hindrance from the controller to which the personal data have been provided”. Car manufacturers may, therefore, in future be obliged to provide customers with machinereadable copies of the data relating to their driving performance. From the perspective of the consumer, this is a step in the right direction not least because that data may be used to, for example, show that the driver is not responsible for an accident. From the manufacturer’s point of view, the new right to portability is a doubleedged sword. On the one hand, it necessitates the implementation of processes that will enable companies to comply with their obligations under article 20(1) of the GDPR. On the other hand, customers may perhaps be encouraged to bring data with them when they buy a new car from a different manufacturer.

With all due caution, it appears that article 20(1) of the GDPR correctly recognises data as a valuable commodity. Whether data needs to be protected by a property right, though, is an entirely different question. Intellectual property rights are granted as an incentive for the creator to innovate and disclose more intellectual property. However, there does not seem to be an apparent need to incentivise the collection and analysis of data. Many commentators also voice the concern that a new monopoly right might stifle the development and improvement of products. In that sense, data may indeed be a barrier.

Dr. Anette Gärtner
Dr. Anette Gärtner, LL.M., works at Reed Smith, a global relationship law firm with more than 1700 lawyers in 27 offices throughout the United States, Europe, Asia and the Middle East. Reed Smith is a preeminent advisor to industries including financial services, life sciences, health care, advertising, entertainment and media, shipping and transport, energy and natural resources, real estate, manufacturing and technology, and education.