Connected cars masterplan could be catalyst for collaboration and new regulation

Out-Law Analysis | 28 Nov 2016 | 4:50 pm | 3 min. read

FOCUS: A new connected cars masterplan expected to be published by the European Commission this week could be a catalyst for the kind of collaboration and new regulation that is necessary to drive the market forward in Europe.

The future of connected cars is an exciting prospect. From interactive dashboards, touchscreen windscreens, and internet-connected entertainment systems, to in-built virtual reality and eventually fully autonomous driving, technology is likely to change how consumers view vehicles and affect purchasing decisions in the market.

Vehicles will behave like the smartphone of today – transmitting and receiving data to and from a variety of sources. Traffic and accident warnings, weather notices, road closure information, route and parking planning and other information could all aid drivers. In addition, increased connectivity could help deliver the latest in 'infotainment' to drivers and passengers and enhance the journey experience.

Businesses in the car market recognise the opportunities. Many OEMs, tiered supply chain component, telecoms providers, software and hardware providers have committed significant resources to harness new technology and establish a position of strength in the market. However, many of the initiatives are being carried out in silos. Collaboration in a number of areas will be important to help deliver what is in the most part currently just a theoretical product.

The European Commission's masterplan for connected cars, which will reportedly be set out on Wednesday, will hopefully drive greater levels of collaboration. Technological and technical standards, such as those being developed in relation to new '5G' connectivity, are vital to development. The Commission's masterplan could help focus industry efforts on working together on communication standards in a way that will not only deliver benefits to them, but to the wider industry and consumers as a whole.

Infrastructure is also a vital component of the envisaged world of connected cars. Vehicle systems will need to interact with the authorities and systems responsible for the road networks and traffic management, for example, and be capable of supporting vehicle-to-vehicle connectivity too. The hardware and software must be in place if connected cars are to come into widespread use. That appears some way off yet, and of course, safety remains the paramount consideration as new technology and systems are contemplated.

The masterplan could also offer an indication of how connected cars might be regulated in future. Uncertainty over issues such as data ownership and liability for accidents may be holding back development.

It is important that businesses active in the market are able to deliver products and solutions that are legal-by-design. No manufacturer wants to have to reverse engineer what they have produced because the legal position changes.

This particularly applies to the use of personal data, which stakeholders view as the gold mine of the future when it comes to personalising the customer experience and the targeted promotion of other goods and services based on user profiles. Privacy-by-design and privacy-by-default is not just a central component of the upcoming EU General Data Protection Regulation, it is also increasingly seen as being expected by today's customers.

Who owns the data generated by connected cars remains unclear. Drivers and even passengers may have rights in certain data where the information is capable of identifying them. This includes, for example, rights to access that data and have it corrected if inaccurate, and potentially control how the data is processed. However, the fundamental question of whether non-personal data in connected cars is an asset which manufacturers and other businesses are free to exploit, whether manufacturers can prevent suppliers from using the data flow generated in the car, or whether drivers own that data along with the vehicle, has yet to be clarified legally.

Manufacturers might look to use connected cars data to inform the future development of new vehicles. Equally, the data on the performance of component parts may, for example, offer them the chance to offer add-on maintenance services or upgrades to car buyers. If the data is said to be owned by the car owner, however, then manufacturers might be restricted in how they might use the information. Manufacturers and tier one suppliers are currently also trying to keep lower tier suppliers out from the usage of car data in order to secure their ambitions in monetising vehicle data, for example, in the context of offering predictive maintenance services.

On liability, the increasing complexity and influence of technology on vehicle systems demands fresh consideration is given to who should be deemed at fault for accidents when they occur. Connected cars systems and data could help distinguish whether technology failures have played a part in crashes, potentially limiting the liability of drivers and instead placing any bill for damages at the door of manufacturers.

The masterplan could signal how EU policy makers view these issues and what approach they might take to regulation. Insurers will be among the businesses within the connected cars market keen to see how the issue of liability in particular is addressed, as it has the potential to have a major effect on motor insurance coverage in the years to come.

Stephan Appt and Ben Gardner are experts in connected and autonomous vehicles at Pinsent Masons, the law firm behind Out-Law.com.