What is Data Sovereignty?
Data sovereignty is the principle that data must follow the laws and regulations of the country where it is stored, processed, or collected. Data within a specific country’s borders must comply with that nation’s data protection, privacy, and access laws.
In a digital world with widespread cloud computing and global data storage, data sovereignty has become a significant concern for businesses, governments, and individuals.
How does Data Sovereignty work?
Data sovereignty primarily revolves around jurisdiction. Data stored in a specific country falls under that country’s legal authority, regardless of the data owner’s location. For example, if a U.S. company stores its data on a server in France, French data protection laws will govern that data.
This concept is crucial in cloud computing, where data often resides across multiple global data centres. Organizations must understand the laws governing data in each country where their data may be stored, as privacy, access rights, and government control vary widely.
What is the Importance of Data Sovereignty?
1. Compliance: Companies must ensure their data complies with local laws to avoid penalties or legal action. It is especially critical for international businesses that must navigate different legal frameworks.
2. Data Privacy: Data sovereignty guarantees that personal information is protected according to local privacy laws, offering better control and security for sensitive data.
3. Risk Management: Organizations can reduce legal risks associated with cross-border data storage and processing by understanding data sovereignty.
Data Sovereignty vs. Data Residency
Data sovereignty defines the legal authority and governance over data based on the country where it is stored, meaning that data must comply with that country’s laws, even if the data owner is elsewhere.
Data residency refers only to the physical location of the data. While data residency indicates where data is stored, it does not determine the legal authority governing it. In short, data residency is about where data is stored, while data sovereignty dictates who controls the rules over that data.