Data Localization : Safeguarding Cyberspace
Data has become a strategic asset for all stakeholders in the digital ecosystem including nations . Protecting personal data of citizens is one of the contentious issues which is widely discussed across the world . Data localization seems to be an answer for safeguarding the data as a key asset within one’s own territory . It refers to a requirement that any entity that processes the data of a particular country’s citizens must store that data on servers within that country’s borders.
Requirements include data pertaining to citizens or residents of a nation to be collected, processed, and/or stored within the country. Going forward in some cases data transfer agreements may have to be inked with different continents / countries if specific data attributes have to be transferred for processing .
Why are dispensations across the globe in favor of data localization
- Protection of personal and sensitive data of citizens
- Access to data by law enforcement and intelligence agencies
- National security
- Improving competitiveness across local markets and boost for digital economy
- Ensuring a regulatory framework in place
- Anticipation of cyber wars and potential misuse of citizen’s data
Law enforcement agencies and even senior govt officials of developing countries have admitted to the facts that tracing cyber crimes have become an onerous task if the servers (data ) are not within their jurisdiction .
Setting up capabilities and a robust framework to collect /store/protect data within the borders is a challenge which countries are grappling with as many a times those who are potentially well equipped to handle the same are located across different locales . Technical and financial capacity of global cloud providers is an important aspect which cannot be ignored especially w.r.t data security .
Firms operating across the globe or catering to different locales may have to bear the brunt in terms of restrictions or constraints even on the competitive side as the local vs global issue may gain prominence .
One of the examples is that of PayPal which was forced to cease operations in Turkey after losing its license due to tech localization regulations set up by the concerned financial regulator.
Data is a sovereign right, and every country has a right to protect its citizens’ sensitive data. Restrictions and regulations in smaller countries could create more hindrances than major markets. Data centers require reliable infrastructure to keep the data physically in country that many developing countries may face challenges to ensure the same.
Most countries still have not implemented data localization laws, but a growing number of countries are adopting data localization requirements. There are some countries, such as China, Russia, Indonesia, Nigeria and Vietnam, that have implemented tough rules around data localization. Indonesia and Vietnam have diluted certain provisions in this regard .
In India the Personal Data Protection Bill (PDP) was drafted in 2019 which was presented to the standing committee for deliberating on provisions regarding both “sensitive” and “critical” personal data . These aspects still remain in the bill as it will be tabled again in the parliament in upcoming sessions , firms may have to adhere to certain compliances w.r.t data localization norms .
As data protection and privacy laws like GDPR, CCPA etc have changed the digital landscape with a clear mandate that data is the fuel which runs the digital economies across the world . The need is to have a standardized approach internationally, frame regulations which will be consistent & applicable to all locales worldwide . A fine balancing act between privacy , protection and marketing with data as a focus point is to be achieved .
The battle for data has just begun .
About The Author :
Aditya Krishnan is a Digital Strategist & Consultant with 10+ years of experience across different sectors and practices . He has managed business transformation engagements ranging from setting up digital platforms , designing marketing strategies to leading analytics projects . An active contributor and participant in the Webmasters , SEO , digital marketing, analytics professional groups/forums . He has authored several publications on various topics across portals and shares his views regularly on latest trends in the digital / marketing space .
