For centuries information has flowed around the world, steadily increasing with the rise of international mail, the first transatlantic cables in the

How Barriers to Cross-Border Data Flows Are Spreading Globally, What They Cost, and How to Address Them | ITIF

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2021-07-20 03:00:03

For centuries information has flowed around the world, steadily increasing with the rise of international mail, the first transatlantic cables in the 1850s, and the first transatlantic telephone cable in the 1950s. What is different now is that the Internet creates the potential to send large amounts of data quickly and at virtually no cost to almost any part of the world. Moreover, on this global network, sending data abroad costs no more than sending data domestically. COVID-19 has made clear that data flows are critical to the global economy, enabling both economic responses (e.g., data sharing for medical research, the monitoring and automated control of vaccine production facilities, and the adoption of digital services for business continuity) and societal responses (e.g., family video calls, contact tracing, streaming content for entertainment, and online shopping). Data flows will only continue to rise as more countries and sectors embrace digital transformation.

Data will flow across borders unless governments enact restrictions. While some countries allow data to flow easily around the world—recognizing that legal protections can accompany the data—many more have enacted new barriers to data transfers that make it more expensive and time-consuming, if not illegal, to transfer data overseas. Forced local data-residency requirements that confine data within a country’s borders, a concept known as “data localization,” have evolved and spread in the four years since the Information Technology and Innovation Foundation’s (ITIF) last major report on data flows and localization.[1] Data localization targets a growing range of specific data types and broad categories of data deemed “important” or “sensitive” or related to national security. The justifications policymakers use have also evolved. Misguided data privacy and cybersecurity concerns remain common, but cybersovereignty and censorship are newer, and in many ways, more-troubling motivations given they are broader and more ideologically driven. Some policymakers—especially those in Europe and India—openly call for data localization as part of digital protectionism, while others disguise localization and protectionism by burying them in technical regulations.