What is Data Sovereignty?
Countries all over the world are implementing increasingly stringent and ever-evolving data sovereignty laws to protect their citizens, but what exactly is data sovereignty? With so many adjacent terms–such as data residency or data localization–thrown about, it can be easy to become confused. Although these terms may appear interchangeable, understanding the difference between them is crucial to implementing the best data practices and staying compliant.
What is data sovereignty?
Rather than a set of laws or regulations, data sovereignty is the guiding principle that defines laws and regulations that data is subject to. For example, the European Union (EU) specifies that data collected from its citizens are subject to the General Data Protection Regulation (GDPR), regardless of where it is stored. This means that any data collected within the EU is sovereign to the EU.
How it’s different from similar terms
Consider data sovereignty as the umbrella term that encapsulates other data compliance terms. Some of the other terms under the umbrella of data sovereignty include:
- Data residency: Data residency refers to the physical location where data is stored. With the proliferation of cloud storage, however, data residency may not always be clear.
- Data localization: Data localization refers to the local laws that govern the collection, processing, and storage of data within a country. Oftentimes, localized data can only be transferred after it meets local data laws.
- Data privacy: Data privacy is the protection of personal data from those who should not have access to it, as well as systems to determine individuals who should have access to that personal data.
- Data boundary: Data boundaries refer to the regional parameters of the data you are protecting, such as ensuring all data collected within the EU is processed and stored in the EU as well.
The challenge of data sovereignty and compliance
As of 2022, over 80 countries have enacted data privacy and security laws. For international brands that collect and process data across multiple jurisdictions, remaining data compliant can be a major headache. Some of the challenges data sovereignty present include the following:
- Increased operational costs: Staying data compliant isn’t cheap. To remain data compliant, your brand may need to invest in additional training, review existing compliance protocols, and perhaps even build new data storage sites.
- Keeping up with evolving laws: Remaining data compliant in the face of ever-changing legislation requires a proactive security strategy and regular legal counsel.
- Siloed data: Your brand could be storing non-compliant data without even realizing it. Not only do antiquated storage solutions like data silos require technical expertise to access, but they may not have been designed to consider data sovereignty.
- Tedious manual labor: Brands just starting their compliance journey could be in for a rude awakening. Pouring over siloed or disorganized data can be a lengthy, tedious process that ultimately results in lost productive hours.
- International cloud infrastructure: Just because your brand is data sovereignty compliant doesn’t mean your cloud computing service is. Many providers extend deployment across multiple sovereignties, so brands must be careful when choosing a cloud service provider.
- Third-party data leaks: Brands should be wary of sharing customer data with third-party suppliers, such as marketing firms. In the event of a third-party data leak, your brand could be found non-compliant for failing to protect sovereign data.
Best practices for ensuring data sovereignty
- Keep it simple: Rather than implement region-specific compliance measures, implement a single, uniform measure that makes your brand compliant with even the most stringent compliance laws.
- Work with trusted cloud providers: Cloud providers such as AWS and Mircosoft operate in-country data centers to ensure local data sovereignty compliance.
- Track your backups: Backup data is also subject to data sovereignty laws, so keep a detailed inventory of your backups to ensure compliance.
- Know local laws and jurisdictions: Consult your legal team early and often whenever expanding into a new jurisdiction.
- Eliminate unnecessary data: Any data your brand collects is subject to data sovereignty laws, even if you don’t use it. Eliminate unnecessary data to minimize the risk of non-compliance.
- Monitor access control: Limit data access to only essential IT admins, especially when transferring data to a new locale.
- Maintain transparent data practices: The more transparent your data practices are, the easier it is to spot non-compliance. In addition, transparent data practices will make proving compliance easier in the event of a regulatory audit.