Data sovereignty

Ashwinram Meenakshisundaram

Data sovereignty refers to the fact that data collected and/or located within a particular nation’s frontiers is bound by that nation’s laws and regulations. As issues around data privacy increasingly arise, companies ought to answer several pressing questions, such as: “What happens to the user data they collect?”, “Who gets access to it?”, “How is user-privacy maintained - if at all?”, and “Is the data handled by a third-party?”

To uphold data sovereignty, over the past couple of years many nations have passed laws such as GDPR specifying how user data is to be handled. This serves a two-fold purpose. Personal information of users remains well-protected and, perhaps more importantly, the data collected from within one nation cannot be accessed by any other entity.

When cloud computing comes into picture, things become a bit tricky. Many companies do not store their consumer data in physical data centres but rather, they partner up with cloud service providers who in turn collect and process their user data. So, while there are varied stipulations around utilising cloud services, most laws require that companies take responsibility for the actions of the service provider and that its data centres be in the host nation itself. Consequently, companies must also adhere to all the regulatory norms and industry best practices if at all they want to continue their operations in the host nation. Failure to do so can invite repercussions including hefty fines as well as suspension of their operational license, amongst others.

Adaptability is the key word for companies doing business across multiple countries. This means that the data which they collect from their users could come under varying privacy laws. Hence, the operational framework for each territory must be devised according to their respective regulations.

Now, the General Data Protection Regulation (GDPR) convention is the gold-standard amongst laws that seek to enforce data sovereignty. Comprehensive at its core, the vantage point of GDPR is that it covers both companies in the EU that collect user-data, and cloud service-providers that hold their data. Although flexible in many aspects, GDPR provides a common data sovereignty framework.

Similarly, there are over 100 nations that have some form of data sovereignty laws in place. To overcome the forthcoming challenges that arise subsequently, companies must come up with a monitoring program that meticulously tracks the overlapping aspects between various laws and ensures that data in their custody remains in compliance even after leaving the territory of origin. For companies, the end-goal of any data collection initiative is to produce specialised offerings based on the peculiar needs and demands of their users but in doing so they must also ensure that data sovereignty is consistently upheld.

Data sovereignty
Image credit:
2022, Euractiv

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