Meagan Nicholson – The legality of cross-border data flows is a pressing issue in International Business and trade today. The term “cross-border data flows” refers to the global transfer of information, data, and ideas electronically over country borders, from point A to point B.[1] Data sharing online is utilized by businesses, governments, and personal users. The ability to exchange ideas and information instantly via the internet has become a main form of communication around the world and a part of global culture.
Individuals exchange data globally on a daily basis, every time an individual uses the internet, sends an email, makes a phone call, has a face time conversation, and so on.[2] Businesses have greatly benefited from the development of cross-border data flows, and electronic data exchange via the internet is now a key part of international trade, commerce, and the global economy.[3] The ability to transfer data so quickly and to store data indefinitely has increased business innovation and productivity, allowing businesses to grow faster and more efficiently.[4]
However, despite the increasing use and growing significance of the use of the internet for business and personal users, governments around the world are restricting the use of data sharing across borders, due to concerns over privacy and cybercrime.[5] As the amount of data transferred online grows, the risks increase: wrong-doers seek to exploit the system and commit cyber-crimes through causing privacy breaches and data security breaches, stealing intellectual property, and sharing morally offensive content.[6] Governments also may enact regulations and restrictions in order to promote local businesses and harm foreign ones, by keeping data locally and out of foreign markets.[7]
Legal issues also arise when discussing cross-border data flows. Privacy rights are at stake because individuals have a privacy right to their information that is stored digitally. However, individuals also have the right to use the internet and exchange ideas and obtain information from the internet. Jurisdictional issues also arise when governments seek to obtain data stored on foreign servers during the course of legal proceedings.
Though the exchange of cross-border data flows is a complicated issue with many views and rights in tension, international cooperation and law can be used to address some of these issues. As of today, there is no modern comprehensive international policy, treaty, agreement, or law that governs cross-border data flows and the trade of information and goods through the internet. Currently, the only global framework that exists that does address information exchange is The World Trade Organization (WTO) Agreement, which was created in 1994.[8] The WTO Agreement set rules for the trade of goods and services, and intellectual property protection. However, because the WTO Agreement was created in 1994, it is outdated and has not been sufficiently updated to address global trade in the digital age. Beyond the WTO Agreement, there is no comprehensive law that governs international trade in the digital age. The WTO Agreement needs to be updated, in order to create a new global comprehensive framework that addresses the sharing of data across borders. In addition to updating the WTO Agreement, countries and governments can enter into trade negotiations, treaties, and privacy shields that contain provisions that address cross-border data flow issues and privacy concerns. Countries can also enact local legislation and policy that modernize laws regarding the use of the internet within their borders. Though addressing this issue is no easy task, it is essential that the world embraces change in order to create laws and practices that work best with new technology, while balancing the concerns of all interested parties.
[1] Coalition of Service Industries, https://servicescoalition.org/services-issues/digital-issues/cross-border-data-flows (last visited Feb. 6, 2018).
[2] Id.
[3] Joshua Meltzer, The Internet, Cross-Border Data Flows and International Trade, The Brookings Institution, 1, 2 (2013), https://www.brookings.edu/wp-content/uploads/2016/06/internet-data-and-trade-meltzer.pdf.
[4] Organization for Economic Co-operation and Development, Report on the Cross-Border Enforcement of Privacy Laws, OECD, 1, 3 (2016), http://www.oecd.org/sti/ieconomy/37558845.pdf.
[5] Meltzer, supra note 3, at 1; see also Organization for Economic Co-operation and Development, supra note 6, at 3.
[6] Meltzer, supra note 3, at 1-5; see also Organization for Economic Co-operation and Development, supra note 6, at 3.
[7] Meltzer, supra note 4.
[8] Mira Burri, The Regulation of Data Flows Through Trade Agreements, 48 Georgetown J. of Int. L. 407, 410 (2017).
