Data Secrets: The Data Act’s New Trade Secrets Framework

Abstract The recently adopted Data Act (DA) introduces a novel regulatory framework governing certain data access, reuse, and portability rules in the European Union. Central to this framework is the role of trade secrets (TS), which reflects the delicate balance existing between obligations to share data and the imperative to protect confidential business information. This paper critically explores the DA’s approach to managing data that simultaneously qualify as a trade secret – a novel category we term “data secrets” – highlighting two key elements: administrative authorities and technical protection measures (TPMs). Competent national authorities, newly introduced by the DA in the lifecycle of TS, perform what could be seen as an ex-ante assessment of trade secret claims, altering traditional private enforcement dynamics. Concurrently, TPMs add a layer of protection to trade secrets through techno-regulatory means, potentially extending their property-like effects. By examining these developments within the Internet of Things (IoT) and Business-to-Government (B2G) contexts, this analysis suggests the DA effectively creates a distinct category of trade secrets, which may play a relevant role in the reshaping of the EU’s data economy. However, this evolution brings forward critical interpretative and practical questions, especially concerning administrative consistency, technical implementation costs, and impacts on market competitiveness and innovation incentives. Ultimately, data secrets represent a significant legislative innovation, requiring a rigorous evaluation to ensure balanced data transparency and confidentiality.