Nations Take Steps to Contain Data Using Digital Borders

Most of us don’t think about it, but every action we take online becomes a piece of digital data. Every time you send an email, make a purchase, go somewhere with your cell phone or interact on social media, you create information about yourself and your habits. Have you noticed that popular mapping apps now suggest a location for your home and work? (Ask me how they know that!). And, since we began traversing the information superhighway, that data has been utilized by massive international companies like Google and Amazon to fuel their unprecedented, rapid growth.

That’s because all the data created by internet users acts as a form of digital record that can be used in a multitude of ways — some good and some bad. Until this point, internet users usually managed the responsibility of risk on their own (and often with unhappy results). Currently, securing data by a user requires massive trade-offs in usability; try turning off location services on your phone and see how long you are willing to live with the loss of services. But now, realizing the potential security and privacy risks, as well as the economic value of data, countries around the world are cracking down on its international mobility. How? Through the creation of digital borders.

Digital borders are nothing new; China and Russia locked down their data long ago. The United States, the European Union, India, and other countries are scrambling to catch up and mitigate serious online risks. The trend toward “digital sovereignty” will see governments striving to keep data that’s generated within their country, stored within their borders.

While laws governing the digital world might seem abstract, their impact will be real. But it remains to be seen if the impact on consumers will be positive. For example, there is a bill being proposed in the US Congress purporting to improve the privacy of individuals.

On the other hand, some companies are less than thrilled by the potential shift in how digital data is handled. Companies like Amazon, Apple, and Microsoft say that the online economy is fueled by the free exchange of data. If companies must store data locally, the measures could hamper their ability to provide products and services consistently around the world without incurring additional costs.

And finally, how will these measures affect the average person? Restrictions probably won’t prevent them from accessing most popular websites, but some services and features might be restricted based on location.

With each country taking a different approach to security and privacy of data, we could be entering a time of confusion in every area, from international politics, to private enterprise, to how each individual uses the internet. The European GDPR (General Data Protection Regulation) drove massive changes in how companies had to handle data, imposing significant costs on companies which were most onerous to small companies. And yet, nothing really changed. These limitations presented challenges as will future ones, yet opportunity for tech companies to fill emerging needs will also arise.

We will continue to monitor these developments. Don’t hesitate to reach out to our office with questions.

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Michael Kimball, Esq.

Mike Kimball offers practical, timely, and economical legal solutions that move projects along and allow you to focus more on your core business objectives. He has years of experience partnering with companies ranging from Silicon Valley startups to firms in aerospace, biotech, construction, and many more. Mike’s in-house experience includes Yahoo!, Krux Digital (acquired by Salesforce), and Commerce One. He has worked on transactions with Eurostar, Red Bull, Major League Baseball, NASDAQ, Goldman Sachs, Liveramp, Amazon, and NASCAR.