What is data-localisation?
The term is being used more and more, and you may be hearing more and more about it: Data Localisation. The accompanying discussion about whether it is good or bad often follows. But what does it mean exactly?
Data localisation is the phenomenon where countries increasingly choose to store their data on servers in their own country. This ensures that data from one’s own country is only stored, processed and used in their own country. An increasing number of countries are doing this. Some even enact laws to prevent their own country’s data from being stored in another country. This has led to the emergence of discussions and many questions on the subject.
But why would a country choose to keep its data within their own borders? There are several reasons for this.
Why is data being localised?
Within the Netherlands we might not have much to do with it yet, but outside the Netherlands – or rather, outside the EU – it is more of a problem: Data is becoming business. Because of mutual distrust, there has long been tension between countries like China, Russia and the US. Also regarding data traffic. The US still has a trade surplus in data traffic. This trade surplus in data means that more data from other countries is stored within the US than vice versa. Countries like China and Russia are rebelling against this. They are doing this because, among other things, they are afraid that their data will end up in the hands of the US. Therefore they have established laws stating that data concerning their own country may only be stored, used and processed within their own country: The data is being localised.
This distrust is not only found in China and Russia, an increasing number of countries have started to fear storing their data abroad. They are afraid that countries like the US will be able to look into their data without their knowledge. In contrast, the US has become suspicious as well of countries like China. For example, it has been alleged that there is a “back door” in the Chinese brand “Huawei”, a claim that has not been proven to this day.
There is growing criticism from the tech world about the phenomenon that is Data Localisation. Questions about free trade are emerging more frequently and people are expressing their unease about the location of their data. After all, if there will be strict rules about the internet – that will be applied on an international level – does the internet still belong to everyone? Will there still be a real ‘free trade’ if a company is not allowed to decide where its data is stored?
Data localisation is sometimes likened to the “splinternet”, the concept where the internet is gradually fragmenting as different countries control and sometimes even censor the use of the internet in their own country. Hence – according to various US tech companies – the GDPR (General Data Protection Regulation) is also part of the Splinternet. Because in their opinion, by blocking sites that can track someone’s data, the internet is no longer a “true” reflection of the internet.
There is also criticism that data localisation will create unfair dilemmas for many countries. If it gets to the point where global rules on local processing of data are established, not every country will benefit. Some countries will not be able to provide resources that are good enough to ensure data security. A tricky issue, indeed.
Positive view of the future
However, there is also a contrasting view. As long as there is no strict legislation, control and censorship on our use of the internet, localisation can also be positive. Positive effects that may also be useful for your business hosted in the Netherlands.
Would you like to read more about this? Then read our blog: “Data Localisation: The pros and cons“.