One of the key aspects of the Data Act[i] is the introduction of provisions on prohibited contractual practices. These provisions are intended to protect businesses operating within the broadly understood digital industry that have a weaker contractual position.
Contractual practices that have been deemed prohibited
The Data Act prohibits the use of contractual terms concerning:
- Access to and use of data
- Liability and remedies for breach or termination of data-related obligations
that are unfair and have been imposed by a (stronger) party on the other (weaker) party to the contract.
Terms are considered unfair if their use grossly deviates from good commercial practice and if they:
- Do not reflect mandatory provisions of EU law that would apply if the term had not been included in the contract
The Data Act distinguishes between two categories of unfair contractual terms:
- Unfair
- Presumed unfair
Unfair terms (blacklist)
A contractual term will always be considered unfair if its object or effect is to:
- Exclude or limit the liability of the stronger party for intentional acts or gross negligence
- Exclude the remedies available to the weaker party in the event that the stronger party fails to perform or breaches the contract
- Give the stronger party the exclusive right to decide whether the data supplied is in conformity with the contract or the exclusive right to interpret the contract
Terms presumed to be unfair (greylist)
In accordance with the Data Act, a contractual provision is presumed to be unfair if its object or effect is to:
- Inappropriately limit the remedies or extend the liability of the weaker party, or inappropriately limit the liability of the stronger party
- Allow the stronger party to access and use the weaker party’s data in a manner that is significantly detrimental to the legitimate interests of the weaker party
- Prevent the weaker party from using the data provided or generated by it during the term of the contract, or restrict such use to the extent that the weaker party cannot use the data in an adequate manner
- Prevent the weaker party from terminating the contract within a reasonable period
- Prevent the weaker party from obtaining a copy of the data supplied or generated by that party during the term of the contract or within a reasonable period after its termination
- Enable the stronger party to terminate the contract at unreasonably short notice
- Enable the stronger party to substantially change the price agreed in the contract or any other substantive terms relating to the nature, format, quality or quantity of the data to be shared, where no valid reason and no right of the other party to terminate the contract in the case of such a change is specified in the contract
The stronger party may rebut the presumption if they can demonstrate that, in this specific situation, the term should not be considered unfair.
Consequences of applying unfair contractual terms
It should be borne in mind that unfair contractual terms are not binding on the weaker party. If an unfair term can be severed from the remaining terms of the contract, those remaining terms will remain binding. However, if the rest of the contract cannot be performed separately from the unfair terms, the entire contract will be invalidated.
Contracts covered by the new rules
The new Data Act provisions on unfair contractual terms apply:
- from 12 September 2025 – to contracts concluded after that date
- from 12 September 2027 – to contracts concluded on or before 12 September 2025, provided that they are:
- of indefinite duration, or
- due to expire at least 10 years from 11 January 2024
Any questions? Contact us
[i] The Data Act is an EU regulation (2023/2854) that introduces new rules on the use of both personal and non-personal data.
