In a world where data can be easily transferred between parties, consideration has to be made for data residency laws within differing regions. When transferring digital data hosted on the cloud, it poses questions about which jurisdiction should be applied and if the data is subject to the laws and governance structures of the nation where the data resides.
With the rise of cloud computing, many countries have passed various laws around the control and storage of data, which all reflect measures of data sovereignty. Organizations that are subject to specific data governance or industry-specific compliance could find themselves in breach of data protection, so understanding its relation to transnational data flow and data residency is the critical responsibility of the Chief Data Officer. So, what does data sovereignty mean for your organization and how can you ensure its implemented?
Data sovereignty refers to ensuring digital data and information is subject to the laws and governance of the country it is collected in. The idea is that wherever your customer is based in the world, if you collect data from them, it should comply with that country’s data protection laws, for example, GDPR if it is located in the EU.
The debate on data sovereignty has been a focus for many years, with the Snowden revelations in 2013 being one major event. It revealed that the US was collecting data on its citizens as well as those around the world from data held by US companies. The program named PRISM collected personal information such as emails, photos, logins for social networks and more from US-based technology companies. This included user information from Facebook, Apple, Google, and Twitter to name a few. The fallout from the ex-NSA (National Security Agency) contractor’s revelations lead to concerns over who can access national information and what the potential issues could be from doing so.
The US Patriot Act also allows for any data stored in the US to be accessed by government officials regardless of where in the world the information originated from. An example of this was when Microsoft was told to grant the US Department of Justice access to Hotmail emails in relation to a case in 2013. Microsoft refused access based on breaking data localization and protecting laws in the EU, as the emails were from an account hosted in Ireland.
In Europe, GDPR was approved by the EU Parliament in 2016 to provide data sovereignty measures for all EU members. Elsewhere in the world, Saudi Arabia developed its own Personal Data Protection Law (PDPL) in September 2021, the first federal data privacy legislation in the country that is sector-agnostic.
If your business is located in a different region completely, it needs to ensure it complies with different regions in where its customers are located, rather than just their own. Many countries, now more than 100, have their own data sovereignty laws in place, so it is imperative businesses understand and comply with them when handling data internationally.
As a legal term, data sovereignty is extremely important as it is linked to data protection and security, especially in the cloud. With cloud services fast growing in the last few years, businesses are trusting cloud SAAS vendors with their data, however, they may be trading on not having full control of this data. Data sovereignty laws provide guidelines for companies to follow around data and what to do. As it refers to the authority to dispose of data, putting this in the hands of third-party cloud vendors who are not following data sovereignty rules poses many questions about data ownership.
Companies need to consider what happens to the data once stored, who can access it, and how it is being protected. If none of these questions provides clear answers, they need urgent clarification. Before using any cloud service to handle data, you should be clear on how they are going to use it and how much control you have over it. As cloud servers can be located anywhere in the world, it needs to be clear data sovereignty is being adhered to for where your customers are based.
If a company wants to ensure they are data compliant and maintains data sovereignty, they need to be careful when using the cloud. Having a sovereign cloud is important, but what is a sovereign cloud exactly? Simply, it ensures that the cloud platform you are using is meeting the requirements regarding data privacy and access. If your business is not using a sovereign cloud, it could mean the data is in breach of that country’s laws.
So how can data sovereignty be implemented correctly when the landscape can be complex? This is where SAAS companies need to ensure they have data centers and servers in-country, so that collecting, managing, or storing customer data is compliant for that region. Some third parties may be able to analyze and sell your data by having this stored in another country, however, GDPR requires companies to use the highest levels of data security and encryption.
Companies need to ensure they retain data sovereignty at three stages – whilst in use, whilst being transmitted and when stored locally or in the cloud. They need to ensure they have the technical and organizational measures in place to do so. Unfortunately, some companies may use platforms that do not provide the highest levels of security with all data. This is where using a platform built with privacy by design is essential, providing your business with peace of mind.
At RealTyme, we know many businesses will have concerns over data sovereignty, which is why we can ensure this and more with our secure communications platform. We do not feel companies should take risks when it comes to this as the potential fines for not ensuring data sovereignty are large, and the impact on your reputation will be in the long term. We take your data privacy seriously, with our platform following strict guidelines.
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