If you think the European Union’s new Data Act and data sovereignty rules are only a concern for EU member states, think again. Despite the UK’s departure from the EU, UK organizations cannot afford to overlook these regulations. The legislation’s reach extends beyond EU borders, impacting any entity that processes data on EU citizens. Ignoring these changes could lead to significant compliance issues for UK businesses.
The new EU legislation aims to empower EU organizations and governments with greater control over critical data, regulating its collection, processing, and storage. This initiative is designed to reduce reliance on non-EU cloud providers and facilitate secure data sharing, all under the watchful eye of EU oversight. According to experts, the rules apply globally, meaning UK companies handling EU citizens’ data must comply.
Context and Historical Comparisons
This is not the first time EU data regulations have influenced UK practices. The General Data Protection Regulation (GDPR), introduced in 2018, set a precedent as one of the most comprehensive data privacy laws, affecting every organization processing data on the EU’s 448 million citizens. The GDPR has already led to significant fines for major brands like British Airways and Marriott International, highlighting the importance of compliance.
Data sovereignty has become a strategic priority amid global political shifts. As data becomes increasingly valuable, ensuring its protection and proper governance is crucial for maintaining consumer trust and business integrity.
Key Provisions of the EU Data Act
Changes to Data Transfer and Storage Rules
The EU’s new data sovereignty legislation introduces stricter rules on data transfer and storage locations. Organizations must be aware of where their data is stored and the applicable national laws. Clear communication and granular policies are essential, especially for sensitive or personal information.
Increased Compliance Requirements
Under the new rules, EU citizens and organizations must have free access to their data and can authorize third-party access. Public sector bodies may also access data during emergencies, such as pandemics or natural disasters. Organizations are required to facilitate data sharing upon request.
Cloud and Hosting Restrictions
Data stored in the cloud must be easily transferable in compliance with the Data Act. Cloud providers must offer transparency regarding data locations and facilitate seamless data migration to alternative services if needed.
Dual Regulatory Frameworks
UK organizations must navigate both EU and UK-specific data regulations. The UK’s Data (Use and Access) Bill, introduced in 2024, aligns with EU laws, simplifying compliance for cross-border trade. The UK’s adoption of its own GDPR version post-Brexit exemplifies this alignment.
Sanctions for Non-Compliance
The EU Data Act will be enforced from September 12, 2025, with significant penalties for non-compliance. Fines could reach up to 4% of an organization’s worldwide turnover, mirroring GDPR penalties. The fines are determined by the data protection authority in the EU member state raising the claim.
Implications and Strategic Opportunities
Solid data governance is no longer optional but a strategic necessity for UK organizations engaging with the EU market. While compliance may seem burdensome, it opens opportunities for controlled data sharing and competitive cloud hosting. Organizations with robust data management practices will find compliance less challenging.
Now is the time for UK businesses to assess their data storage policies, review cloud provider agreements, and ensure compliance with the new regulations. Proactive measures will not only prevent penalties but also position organizations to capitalize on new market opportunities.
This article is part of TechRadarPro’s Expert Insights channel, featuring industry leaders’ perspectives. The views expressed are those of the author and do not necessarily reflect TechRadarPro or Future plc. Interested in contributing? Learn more here.
