Opinion | Why global data flow is under threat, and why Asia is in a strong position to benefit
- Firms must now consider all international data flows, including commonplace activities such as CRM systems, cloud solutions, or even operating a global website
- In Asia, data is commonly seen by much of the region’s population as something to be used as a force for good
Global trade largely depends on the free flow of data across borders – that is one reason data is often called “the new oil”. It is the very lifeblood of the digital economy.
Yet in the last few years the reality of international data flows has found itself out of step with the mercantilist direction of trade policy.
At first glance, the ruling on July 16 from the EU’s highest Court in the highly-anticipated Schrems II case appeared only to have major consequences for data sharing between the EU and the US. Now it’s abundantly clear that the decision presents a vast set of commercial, operational and legal challenges and risks for businesses all over the world.
The ruling affects all multinational businesses that transfer data in and out of the EU, use EU service providers, have EU entities or operations, or even just have EU-based customers or users – and not least the many businesses that rely on cloud and outsourcing providers in Asia.
In a nutshell, this is serious. But much of the world’s attention is focused elsewhere.
The Schrems II case, officially known as Data Protection Commissioner v Facebook Ireland Limited, Maximillian Schrems, concerns a complaint from Maximilian Schrems, a well-known Austrian data privacy activist, that Facebook was not adequately protecting EU personal data when transferring and storing it in the US, in part because the US does not have similar data protection laws to those in the EU, i.e., the General Data Protection Regulation (GDPR) and also because of the reach of US surveillance and national security laws over the data once in the US.