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Demanding data localization

One area of particular concern to governments, as well as of great commercial interest to US-based digital corporations, is the control and exploitation of data. The BRICS nations - especially its two populous Asian members - are home to the world’s largest potential sources of data to be mined. Data has been transformed into a valuable global commodity and a transnational currency of the digital age; ‘a new economic resource for creating and capturing value’, according to UNCTAD’s Digital Economy Report, which adds that ‘control over data is strategically important to be able to transform them into digital intelligence’ (UNCTAD, 2019: xvii).

The growth in mining, trading and manipulation of data in the data-driven economy has provided extraordinary power to largely US-based digital giants, who deal with an enormous amount of private data and public information (US

Government, 2016; Mayer-Schoenberger and Ramge, 2018). Data control by digital platforms - what Jin has labelled ‘platform imperialism’ (Jin, 2015: 11) and the potential for'digital colonization’ (Couldry and Mejias,2019) have raised widespread concerns among BRICS governments. As an UNCTAD report notes, global Internet Protocol traffic, ‘a proxy for data flows’, has grown exponentially in the past two decades. In 1992, global Internet networks carried approximately 100 gigabytes (GB) of traffic per day. By 2017, such traffic had surged to more than 46,600 GB per second, and was projected to reach 150,700 GB per second by 2022 (UNCTAD, 2019: 9, emphasis added).

It is not surprising then that the US government and corporations have been aggressively promoting data liberalization and strongly resisting attempts at data localization, which is seen by the US as a threat to ‘a free and open global Internet’. A 2013 task force report by the US Council on Foreign Relations recommended that all future trade agreements between the US and its trading partners contain ‘a goal of fostering the free flow of information and data across national borders while protecting intellectual property and individual privacy’ (Negroponte and Palmisano, 2013: x).The National Cyber Strategy of the US also maintains that its key objective is to ‘promote the free flow of data across borders’ (US Government, 2018: 15).

According to the Digital Trade Restrictiveness Index produced by the Brusselsbased European Centre for International Political Economy, China, Russia and India were the three countries with the ‘most restrictive policy environment for digital trade’ (Ferracane, Lee-Makiyama and van der Marel, 2018: 8). In 2015, Russia implemented a new law that demanded companies store data about Russian citizens on Russian territory. According to the law, foreign companies which operate within Russian cyberspace have to notify the national Internet watchdog, Roskomnadzor about their data location. In 2019,the Russian search engine Yandex set up a‘public interest fund’ that could provide the Russian government power over key governance decisions to ensure that Russian data remains within the country.

As discussed above, China has always had control over its data, so localization issues there have a different trajectory and are more concerned with what happens when Chinese Internet providers access and trade in data in other countries, such as data harvested from global consumers of apps likeTikTok. In India, Chinese-owned and operated smartphones - Huawei, Xiaomi, Oppo and Vivo - account for 70 per cent of the market (the world’s second biggest). Given that China already leads the world in such areas as Al and digital mobile payments, and is exporting its model globally through the BRI, it will also resist attempts at data localization.

Despite being the second-largest economy in the continent after Nigeria, debates on data localization and sovereignty in South Africa have been relatively limited, with the government approving its National Cyber Security Policy Framework only in 2012. Though more active on Internet governance-related issues as mentioned above, Brazil, too, was late to the issue of data localization: the Data Protection Law (Lei Geral de Protefao de Dados), which regulates the collection and treatment of personal data, was approved in 2018 and modified a year later by the Brazilian

Congress, creating the National Data Protection Authority (Autoridade National de Protefdo de dados).

The Indian position towards data localization is compounded by the fact that, as the country runs a large proportion of the global business-process-outsourcing (BPO) market through its globally connected outsourcing companies, including Infosys, Tata Consultancy Services, Wipro and Cognizant, much of their work is dependent on US clients and their international data. Although India has largely supported the US multi-stakeholder approach to Internet regulation and the US giants - Facebook, Google and Amazon and their affiliates - continue to shape the Indian cyberspace, in the past decade Indian Internet companies have begun to demand localization of Indian data, a move supported by the nationalist government of Prime Minister Narendra Modi, which is setting up national data-sharing regimes and infrastructure.

In 2018, India demanded that international tech and payment firms such as Mastercard,Visa and American Express store Indian data locally, reflecting the need to maintain India’s technological sovereignty. A panel headed by the co-founder of Infosys, Kris Gopalakrishnan, working on the government’s cloud-computing policy, recommended that data generated in India should also be stored within the country, to ensure that ‘data generated from India can be utilized for the benefit of Indian citizens, governments, and private players’. While agreeing that ‘the flow of data across borders is essential for a free and fair digital economy’, the report warned that ‘India’s national interests may require local storage and processing of personal data’ (Srikrishna Report, 2018: 10). India wants, conceptually at least, to be the one to articulate a global South perspective on data localization. Distinguishing itself from the three main approaches to data localization represented by the US (no restrictions), the European Union (qualified restrictions) and China (strong restrictions), the report suggests that India could forge a ‘fourth path’,‘not only relevant to India, but to all countries in the global South looking to establish or alter their data protection laws in light of rapid developments in the digital economy’ (ibid.: 13).

Indian policy makers are looking to Chinese success in creating indigenous digital corporations that are now increasingly going global. Aruna Sundararajan, India’s Secretary ofTelecommunications told the New York Times, ‘we don’t want to build walls, but at the same time, we explicitly recognize and appreciate that data is a strategic asset’ (quoted in Goel, 2018). India’s draft e-commerce policy, released in 2019, speaks of‘India’s data for India’s development’, adding ‘data are the new oil therefore, just like oil, or any other natural resource, it is important to protect data’ (Government of India, 2019). Invoking Mahatma Gandhi’s movement against British colonization, Reliance Industries Chairman Mukesh Ambani told a high-profile conference in 2019 that India needed a new movement against ‘data colonization ... [as] data is the new wealth’ (quoted in Langa,2019). Such nationalistic rhetoric has a pragmatic side to it, as Reliance Jio is the biggest player in the country’s cyberspace, having invested heavily in digital infrastructure to promote its suite of apps (Mukherjee, 2019). Nevertheless, data localization has become a focus of attention to counterbalance US hegemony of the Internet and the BRICS countries, particularly, Russia, China and India, can provide an alternative discourse on data sovereignty that could be a model for the majority world to use the resources of Internet for economic development.

 
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