newtech.law - legal aspects of new technologies

The internet of things and related services is one of the key industries affected by the EU’s Data Act. Businesses in this sector may have to make changes to bring their operations into compliance with the new requirements. In this article we examine the key obligations under the Data Act for IoT companies, and their operational implications.

Pre-contractual information obligations

What do these duties involve?

Entities that sell, rent or lease a connected product are required to provide at least the following information before entering into a contract with users:

• What data can be generated by the connected product (type, format, and estimated volume of data)
• Whether the connected product is capable of generating data continuously and in real time
• Whether the connected product is capable of storing data on the device or on a remote server, including, where applicable, the intended duration of data retention
• How the user may access, retrieve or, where relevant, erase the data, including the technical means to do so, as well as their terms of use and quality of service.

The Data Act became applicable on 12 September 2025. What do businesses need to pay attention to under this new EU-wide regulation?

Nature and purpose of the Data Act

The Data Act—Regulation (EU) 2023/2854 of the European Parliament and of the Council of 13 December 2023 on harmonised rules on fair access to and use of data and amending Regulation (EU) 2017/2394 and Directive (EU) 2020/1828 (Data Act)—is an EU regulation, and as such applies directly in Poland and all other EU member states. At the national level the Data Act will be supplemented by local regulations, but these will essentially govern only procedural issues (e.g. infringement proceedings), not substantive issues. In other words, substantively the Data Act will govern across the entire EU.

To maintain the essential balance, I suggest sometimes taking a sceptical look at the tech rapture which we are increasingly swept up in. Then we will grasp that investing unheard-of amounts in the growth of AI and other digital technologies is not our most pressing need now.

For some time I’ve been bothered by the Solow paradox. This is the entirely counterintuitive connection observed since the 1980s between the growth of digital technologies and productivity. The economic data for the last 40 years show that the most advanced economies have not achieved a significant growth in productivity, despite the spread of computers, the internet, and various digital tools. Indeed, the productivity indicators during this period have been clearly lower than in periods preceding the digital revolution.

In its lofty aims and declarations, the EU’s Artificial Intelligence Act clearly calls for human oversight of AI systems. But drilling down to the particular duties of entities using AI systems, the AI Act isn’t so clear. This article seeks to outline the key challenges in this context facing providers and users of AI systems.

EU regulations banning certain AI practices go into effect on 2 February 2025. Some institutions may assume that the bans only apply to extreme practices, which they would never be involved in. But the ban on using AI systems to assess the risk of that someone has committed a crime, or will commit a crime, shows that this is not the correct approach. A more in-depth analysis reveals that some market practices now considered standard, especially in financial services, may prove questionable once the bans enter into force. This is particularly true for monitoring of money-laundering risk and more broadly the risk of fraud.

The Digital Markets Act or DMA (Regulation (EU) 2022/1925 of the European Parliament and of the Council of 14 September 2022 on contestable and fair markets in the digital sector), which entered into force on 1 November 2022, creates many new obligations for businesses operating in the digital sector, particularly so-called “gatekeepers.”

The DMA will impact the functioning of the entire digital ecosystem—not only gatekeepers, but also other participants in digital markets, including business users and end users of core platform services, competing providers of core platform services, and providers of other digital services.

This is because the obligations and prohibitions imposed on gatekeepers will either directly or indirectly vest other groups with rights they can pursue before national courts.