Since so many businesses and individuals rely on cloud services, data localization could change Internet usage dramatically. For example, data localization laws could require that cloud companies change the way they conduct business and in what countries they store data to optimize their cloud operations. They might no longer be able to service customers in every country in the world.
In the wake of revelations that the U.S. and UK governments regularly monitor private communications – including Internet usage, GPS data, and cell information – a number of countries are considering a new type of law called “data localization.”
In the simplest of terms, data localization laws would require that businesses that operate on the Internet – including Internet service providers, companies with data operations, and cloud services that control and maintain digital data for business and individuals, including redundant backups – store that data within the country where the businesses are located, rather than on servers in other countries.