Data centers to move onshore in line with privacy laws?

Data privacy regulations are tightening across the world. In recent weeks, following data breaches, there have been numerous reports of countries proposing tighter privacy laws. The proposed Digital India Act, for example, would see India strengthen privacy and data localization regulations; elsewhere, Australia is considering an amendment to the country’s privacy law. In August, Vietnam introduced a law that mandated service providers to domestically store personal data, including individual identities, financial records, digital footprints, and online connections; something which has been replicated in Indonesia. Subsequently, as JLL data shows, data center operators are increasingly looking at setting up facilities onshore.

JLL, a global commercial real estate services company, outlines that this is specifically a trend seen in emerging markets such as Southeast Asia and North Asia, and it predicts that this will accelerate in the next two to three years. Chris Street, Managing Director of Data Centers, Asia Pacific, JLL, during a recent interview with Mingtiandi, explained that the trend of content localization is also energizing the data center and digital infrastructure industry: “The content needs a home to sit in, so the data center becomes that home. Serving consumers locally and being closer to the end user can also address latency and performance issues that may affect streaming of the content.”

The company gave the example of a new 32-megawatt data center project operated by Philippine digital infrastructure provider YCO Cloud Centers in the south of Manila, Philippines. That said, not everyone supports storing data on shore, with organizations such as Telstra, AWS, and the Australian Banking Association (ABA) claiming that the offer of data localization can weaken the country’s data security. ABA’s submission paper in response to the Department of Home Affairs discussion paper on data security (as part of the National Data Security Action Plan), for example, said: “Requiring data to be kept onshore would disrupt these existing commercial and infrastructure arrangements.” Meanwhile, Meta claimed that data localisation requirements can “inhibit business growth.”

The social media giant also argued that the local data storage requirements seen in India, Vietnam, Turkey and China have broader implications for the state of an “open, global internet,” and are often intended to “facilitate the surveillance or censorship of citizens’ online activities and violate individuals’ human rights including freedom of speech, expression, access to information, and privacy and due process rights.”