Data Localisation: The pros and cons

Data Localisation: The pros and cons

In the previous blog “Data-localisation: Infrastructure in your own country” we looked at what Data-localisation entails, and why more and more countries are adopting it. 

We have also already named some tricky issues that have come up in discussions on the topic of Data-localisation. In this blog, we will list the main advantages and disadvantages.

Pros and Cons

Pros and Cons list

The Data localisation phenomenon is not yet very prevalent in the Netherlands – or rather the EU. There are no countries in the EU that have established laws for Data localisation. When it comes to data, there is still free trade within the European Union. This has to do with the fact that in the EU there are stricter rules on data protection. There is less distrust among countries. 

This is not true for all countries. In other parts of the world, the rules regarding data security and privacy laws are different and perhaps more unclear. It is therefore impossible to say whether data localisation in its entirety is “good” or “bad”. For every advantage there is a disadvantage and vice-versa. 

For this reason, we have made an overview with the most important advantages and the corresponding disadvantages of Data localisation as a global phenomenon.

 

Advantages

 

Disadvantages 

 

Increased availability:

Once the data of citizens and companies of one country is stored within one’s own country, the data is also more accessible. This can ensure that the government and intelligence agencies – provided they have a good reason – can access the data more easily in order to detect criminal activities more quickly. 

Distrust:

Not all countries have such strict rules regarding privacy-sensitive information. Therefore, there is unrest in some countries because the citizens do not have the confidence in the government to properly handle the privacy-sensitive data of citizens and companies. If these countries were to obligate companies to store data domestically, this could cause more unrest.

Physical availability:

Localizing data also means that the data becomes physically more accessible: After all, the servers are located in their own country. This is beneficial for companies, for example, because the Data Centers – where the data is stored – are more physically accessible and therefore easier to maintain. There is better visibility into the physical security of the data.

Cost:

Building Datacenters is not free. Properly maintaining and guarding sensitive data can cost a lot of money. Money that some countries do not have. In addition, establishing data centers requires a good Internet connection, which is not as reliable in all countries. These countries therefore benefit from being able to store their data elsewhere.

Accessibility:

By keeping data local, every company from that country has access to the same resources and a consistency is formed in terms of service that can be offered. As a result, the consumer does not have to worry about consistency in security of his/her data on different platforms.

Closure

Establishing strict rules for keeping data local could have a negative effect on the openness of communication abroad. An openness that is precisely important within the EU. It could therefore impede free trade. 

Security:

If all data from one country is stored in the same country, there is better supervision of the degree to which the data is secured. All companies have to comply with the same requirements set by that country regarding digital and physical security.

Technological developments: 

A company from a country where technological developments are not yet advanced can benefit from storing data externally. In this way, a company can choose where and how it stores and secures its data by taking advantage of a better technology offering from another country. If laws are introduced to only store data locally, this will no longer be an option. 

 

All in all, the question of whether data localisation is good or bad is not so black and white. It can be beneficial for a prosperous country where it can only cause problems for a country with a technological backlog. For now, instituting strict rules and laws to keep data local doesn’t seem like a good idea but localizing your data without strict regulations can have benefits.

Want to read more about Data localisation in the EU and what is the best infrastructure choice for your Dutch company? Read our blog “Data localisation in the EU: keeping your data local”.

 

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