Thierry Breton, the official at the European Commission in charge of internal market laws, says that the controversial EU rules that require a kill switch for specific smart contracts could make it harder to set standards for the industry.
Breton stated that the provisions voted on by lawmakers earlier that day no longer meet the objectives set out in a 2022 Commission legal proposal known as the Data Act. He explained that “we need to harmonize basic requirements for these smart contracts” to ensure interoperability, legal certainty, and large-scale deployment.
When the proposal was devised, the intention was to mandate standardisation for the organisations to develop these requirements. As the parliament wanted to change these basic requirements, it would become harder to develop standardised rules for smart contracts.
Breton said that he was aware of the parliament’s plans, which mean anyone offering a smart contract as part of a data-sharing agreement should ensure it can be terminated or reset if something goes wrong. This might negate the purpose of a smart contract, intended to be unalterable and immune from central control.
However, he still wanted to see smart contracts succeed as they are useful tools to enable data sharing. Smart contracts could ensure that both people who own and get data will follow the rules for sharing data.
Breton is now set to mediate between lawmakers and national governments to hammer out a final law, which aims to set out exactly how the makers of smart devices like cars or fridges can use the information they gather.