Sovereignty and Data Localization

Paper by Emily Wu: “Data localization policies impose obligations on businesses to store and process data locally, rather than in servers located overseas. The adoption of data localization laws has been increasing, driven by the fear that a nation’s sovereignty will be threatened by their inability to exert full control over data stored outside their borders. This is particularly relevant to the US given its dominance in many areas of the digital ecosystem including artificial intelligence and cloud computing.

Unfortunately, data localization policies are causing more harm than good. They are ineffective at improving security, do little to simplify the regulatory landscape, and are causing economic harms to the markets where they are imposed. In order to move away from these policies, the fear of sovereignty dilution must be addressed by alternative means. This will be achieved most effectively by focusing on both technical concerns and value concerns.

To address technical concerns, the US should:

1. Enact a federal national privacy law to reduce the fears that foreign nations have about the power of US tech companies.

2. Mandate privacy and security frameworks by industry to demonstrate the importance that US industry places on privacy and security, recognizing it as fundamental to their business success.

3. Increase investment in cybersecurity to ensure that in a competitive market, the US has the best offering in both customer experience and security assurance

4. Expand multi-lateral agreements under CLOUD Act to help alleviate the concerns that data stored by US companies will be inaccessible to foreign governments in relevant to a criminal investigation…(More)”