May 12, 2014 - 2:00pm

Business Without Borders: How Cross-Border Data Flows Boost Global Prosperity

Former Senior Director, Center for Global Regulatory Cooperation International

“The Web grew as something which did not involve borders…[the] Internet is a nationless thing” –Tim Berners-Lee, inventor of the World Wide Web

The Internet serves as a great equalizer, allowing companies of all sizes to thrive globally as they compete on quality and price alone. But it isn’t just goods, services, people or money crossing frontiers: The freedom to seamlessly move data across national borders benefits both businesses and consumers, enabling them to access the best available technology and services wherever those resources may be located.

In order to preserve the benefits of cross-border data transfers, the Chamber has partnered with the global privacy and cybersecurity experts at Hunton & Williams LLP to develop a white paper entitled Business Without Borders: The Importance of Cross-Border Data Transfers to Global Prosperity. The paper highlights the benefits of cross-border data transfers across all sectors of the economy and presents pragmatic solutions for developing mechanisms that protect privacy while facilitating data flows.

All sectors benefit from the ability to move and access information globally — and not just companies traditionally thought of as tech or “Internet.” Many small businesses become “accidental exporters” when they create a website and gain instant access to the 95% of the world’s customers outside of the U.S. borders.

For example, a sprocket manufacturer in Toledo, Ohio, may suddenly find untapped demand across the world in Australia. However, he needs to be able to move information related to supply chains, logistics, client records, and financing, among other categories, in order to meet the demands of the Asia-Pacific sprocket market.

While the movement of information across national borders drives today’s global economy, some misinformed policymakers are attempting to take the “world” out of “World Wide Web” by restricting the ability to transfer information abroad. These restrictions limit the ability of companies to process, store, and access information on a global basis, restricting their choices based on geography rather than quality.

Too often, the “forced localization” of data is justified by those who mistakenly conflate concerns regarding government use and access to data with unrelated commercial activities. Rather than addressing legitimate concerns over government surveillance, the end result is to merely cut off a country’s citizens from the global economy.

Regardless of the specific geographic or political context, Business Without Borders finds the following key concepts are critical to ensuring agile cross-border data transfer regimes that will facilitate the global data flows of the future:

  • Recognition that there are many different approaches to regulating cross-border data transfers, and that differing mechanisms can ensure a similar desired level of data protection.
  • Movement away from rigid one-size-fits-all regulations toward more outcome-focused regimes.
  • A clear delineation between the issue of government access to data and the distinct issue of cross-border data transfers in a commercial context.
  • Assurance that the frameworks we develop today are fit for tomorrow.
  • Redirection of responsibility for the protection of personal data to those who use the data.
  • Implementation of strong, binding trade agreement commitments that prohibit data localization requirements, support unimpeded data flows, and encourage interoperability among privacy regimes.

Image: phsymyst/Flickr. Licensed under a Creative Commons Attribution 2.0 Generic license

About the Author

About the Author

Former Senior Director, Center for Global Regulatory Cooperation International