Data localisation: Infrastructure at homeArchitecture
Puck, 28 September 2022
What is data localisation?
The term is becoming more common 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 originating from their own country can only be stored, processed and used in their own country. More and more countries are doing this and even enacting laws. Laws to prevent data from their own country 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 only local? There are a number of reasons for this.
Why is data being localised?
In the Netherlands we may not have much to do with it yet, but outside the Netherlands – better yet – 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 in the area of data traffic. The US still has a trade surplus in this area. 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 data from their own country will end up in the hands of the US. They have therefore introduced laws stating that data regarding their own country may only be stored, used and processed in their own country: The data will be localised.
This mistrust is not only found in China and Russia. More and more countries are afraid to store their data abroad. They are afraid that countries like the US will be able to look into their data without being aware of it. In return, the US is also suspicious of countries like China. For example, the US has suggested that there is a “back door” in the Chinese brand “Huawei”, a claim that has not been proven so far. This question is now also slowly beginning to surface in the EU. Companies are starting to wonder whether it is still safe to store data in another country. What if something happens in that country that we cannot do anything about? National borders can be closed, but this also applies to internet borders.
There is growing criticism from the tech world about the phenomenon that is Data Localisation. More and more questions about free trade are emerging. People are expressing their unease about the freedom in choosing the data location. Will the internet still belong to everyone if there are strict international rules? Is there still a real “free trade” if a company cannot decide for itself where its data is stored?
A common comparison is the “splinter net”. The phenomenon where the internet is slowly fragmenting as different countries control and sometimes even censor the use of the internet in their own country. For example – according to various US tech companies – the GDPR (General Data Protection Regulation) is also covered by the Splinter Internet. Because in this way, according to them, the Internet is no longer “truly” reflected by blocking sites that can track someone’s data. The European Union, in turn, does not agree with this statement.
There is also criticism that data localisation will create unfair dilemmas for many countries. Not every country will benefit from strict rules on the local processing of data. Some countries will not be able to provide resources that are good enough to ensure data security. A difficult issue, therefore.
Positive view of the future
However, there is also a dissenting voice. As long as there is no strict legislation, control and censorship of our use of the internet, localisation can also be positive. Positive effects that may also be useful for your business in the Netherlands. Want to read more about this? Then read our next blog: Data Localisation: The pros and cons.