Data sovereignty is a critical component of data management and security. Nations, states and political bodies, such as the European Union, continue to beef up user privacy laws. These laws directly impact data at rest and data in transit across cloud deployments.
Let's examine the concept of data sovereignty and data sovereignty compliance, some specific sovereignty laws, and the various challenges and issues related to managing data within sovereignty boundaries. Use this information to strengthen your organization's data management and privacy stance.
Data sovereignty, localization and residency
To understand how data management works within the context of privacy, you first must recognize the basic terms associated with it. Here are three primary concepts to know:
- Data sovereignty. Data is subject to the laws and regulations of the country where it is generated or stored. Data management must comply with the laws in that jurisdiction.
- Data localization. Data must be collected, processed and stored within a country's borders before being transferred to another jurisdiction, allowing the data to remain under that jurisdiction's supervision.
- Data residency. Data stored within a specified location makes it subject to that jurisdiction's laws.
These terms are not interchangeable and directly affect how you manage data in a cloud infrastructure.
Data sovereignty and the cloud
Your organization must be aware of the many different aspects of data sovereignty and learn how to carefully manage them in its cloud deployment. Data storage locations must account for more than just being near the consumer for low-latency transfers. You must select locations based on privacy laws, government access to customer information and resource availability.
Other considerations include the following:
- Managing locations for hot, warm and cold backup storage.
- Preparing to expand into new markets in different regions.
- Integrating AI that might optimize storage by moving information.
Penalties could be substantial. Businesses must understand and comply with data sovereignty laws and regulations. Data sovereignty compliance is key.
Regulatory compliance and consequences
Organizations face unique challenges when complying with data sovereignty regulations. Data could reside and be consumed within various political entities worldwide, including at the national, state, provincial and local levels. Constant changes within these political boundaries are a concern, as are changes to the relationships among these entities. That means your organization must juggle multiple jurisdictions and be aware of the relationships between those jurisdictions.
Examples of standard data privacy laws include the following:
- GDPR. Europe's primary data sovereignty law grants citizens control over and protection for personal information. It is the de facto standard example of data protection.
- HIPAA. The regulation prescribes how organizations and providers manage protected health information in the United States.
- Personal Information Protection and Electronic Documents Act. This Canadian legislation governs how private companies collect, use and disclose personal information, including cross-border data transfers. The law requires consent for data collection and use.
- Personal Data Protection Act. This pivotal law in Singapore dictates how personal data is collected, used, disclosed and protected.
- Privacy Act 1988. This act outlines Australia's national policy for managing information gathering, use and disclosure across the government and private sectors.
Companies found guilty of violating data sovereignty and related laws are usually punished by fines, although consequences vary by jurisdiction. Less tangible consequences include erosion of customer trust, damage to public reputation and disruptions to the business as it realigns with sovereignty and privacy requirements.
When assessing data sovereignty compliance, consider the following:
- Data security. Data security is the primary focus of privacy and sovereignty. Businesses must secure data in transit, at rest and in use. Data sovereignty resides under these broader security concepts because it still requires physical and logical access control, data breach avoidance and antimalware practices.
- Cloud computing infrastructure. Cloud computing both increases and reduces the burden data sovereignty laws place on your company. The burden is increased by the offloading of responsibility, behind-the-scenes automation and reduced control, which are the hallmarks of distributed processing and storage of cloud computing. It is much more difficult to control exactly where your data is at any given moment. Yet, cloud service providers (CSPs) also give organizations greater visibility and control of where their data is being sent. CSPs also aid smaller organizations by guaranteeing various levels of privacy and locale management, reducing the research and compliance workload.
- Data access and collaboration. Remote work and a distributed workforce require that users can access data whenever they need to. Companies must understand how remote workstations download data and whether these downloads fall under the oversight of specific laws and regulations. Edge computing and AI-enabled services also must be carefully considered.
- Cost constraints. Data sovereignty compliance can be costly, especially for smaller organizations. The cost is often divided into two parts: actual compliance requirements and the resources invested in understanding what these requirements are and how to adhere to them. In some cases, CSPs can reduce this cost by guaranteeing a level of compliance and reducing the amount of research your organization must conduct to understand compliance.
- Data classification. Classification is essential when managing data in the context of cloud security and data sovereignty laws. Your organization must clearly understand the data it has, that data's internal sensitivity and the impact of external privacy governance. Automated and AI-based data classification becomes even more critical with data sovereignty concerns in mind.
- Lifecycle management. Data sovereignty regulation increases the need for lifecycle management. Companies must understand, document and manage how they collect, store, process, retain and remove data. Data can't be governed effectively without understanding its lifecycle and use within the organization.
- National security. Government bodies, defense industry companies, infrastructure providers -- power, communications, water, etc. -- and other national security organizations are particularly affected by data sovereignty. Understanding and controlling the transmission and storage of data that can never be intercepted by foreign powers is crucial. Additional governance is required as these organizations continue to migrate to the cloud.
Work with your CSP
All organizations, particularly smaller companies, must remember they are not alone in managing data sovereignty issues. CSPs offer extensive services surrounding these issues. Expect those services to expand as more nations and states establish privacy and information control laws.
Data sovereignty guidance and services are available from AWS, Microsoft Azure and Google Cloud. Because these providers have experience satisfying data requirements for thousands of companies, they have developed frameworks for compliance. To that end, working with CSPs is critical when addressing data sovereignty concerns.
Organizations must begin to address how they manage information privacy within the context of data sovereignty. Understand where your data resides and which laws and regulations apply. Expect complexity around cloud deployments, interstate and international business, and ever-changing relationships between governments.
Work with your CSPs because they understand how to implement the configuration requirements dictated by data sovereignty.
Put data sovereignty compliance at the top of your annual to-do list, especially if your organization currently lacks a comprehensive approach to dealing with this essential issue. The impact of noncompliance is too severe t`o ignore. Begin today.
Damon Garn owns Cogspinner Coaction and provides freelance IT writing and editing services. He has written multiple CompTIA study guides, including the Linux+, Cloud Essentials+ and Server+ guides, and contributes extensively to Informa TechTarget Editorial, The New Stack and CompTIA Blogs.