US tech giants plan to fight India’s data localization plans

An Indian man takes a picture of the Taj Mahal. India wants to compel technology companies to store their data locally, triggering a backlash from some firms. (Shutterstock)
Updated 18 August 2018

US tech giants plan to fight India’s data localization plans

  • Global efforts to protect data on the rise
  • Technology giants plan lobbying offensive

NEW DELHI: US technology giants plan to intensify lobbying efforts against stringent Indian data localization requirements, which they say will undermine their growth ambitions in India, sources told Reuters.

UStrade groups, representing companies such as Amazon, American Express and Microsoft, have opposed India’s push to store data locally. That push comes amid rising global efforts to protect user data but is one that could hit planned investments by the firms in the Indian market, where the companies currently have limited data storage.
The issue could further undermine already strained economic relations between India and the US.

Technology executives and trade groups have discussed approaching Prime Minister Narendra Modi’s office to appraise him of their worries. Separately, the industry is considering pitching the issue as a trade concern, including at the India-US talks in September in New Delhi, according to two sources familiar with the matter.

Though a final decision hasn’t been made, the deliberations come while the US and India are locked in a dispute over US tariff increases and on the Indian policy of capping prices of medical devices, which hurts American pharmaceutical companies.

“This issue is important enough to be discussed at the India-US trade level,” said Amba Kak, a global public policy adviser at the Internet company Mozilla Corp.
“Data localization is not just a business concern, it potentially makes government surveillance easier, which is a worry.”

Stricter localization norms would help India get easier access to data when conducting investigations, but critics say it could lead to increased government demands for data access.

Technology firms worry the mandate would hurt their planned investments by raising costs related to setting up new local data centers.

Greater use of digital platforms in India for shopping or social networking have made it a lucrative market for technology companies, but a rising number of data breaches have pushed New Delhi to develop strong data protection rules.

Shamika Ravi, a member of Modi’s economic advisory council, said data localization was a global phenomena and India wasn’t an outlier.
“It’s in the long term strategic and economic interest,” said Ravi, who is also a research director at Brookings India.

The main government committee on data privacy last month proposed a draft law, recommending restrictions on data flows and proposing that all “critical personal data” should be processed only within the country. It would be left to the government to define what qualifies as such data.

Global companies are coming together to push back.

In a meeting last week organized by lobby group US-India Strategic Partnership Forum, executives from Facebook, Mastercard, Visa, American Express, PayPal , Amazon, Microsoft and others discussed plans to approach Indian lawmakers, including Indian parliamentary panels on information technology (IT) and finance, five sources said.
The industry also discussed approaching media and Internet groups to explain why data localization would be bad for India’s booming IT, e-commerce and payments landscape, the sources said.

“People are fairly stressed and scared,” said an executive working for a multinational technology firm.

The US-India lobby group said it was “nearly impossible” to implement “industry-specific regulations in our global data environment without the ripples being felt.” It didn’t comment on its recent meeting, but said it will continue facilitating policy discussions.

Mastercard, American Express and Amazon didn’t respond to a request for comment, while Facebook, Microsoft, Visa and PayPal declined to comment.

The Indian bill, which was opened for public comments this week, will later go to parliament for approval.
The US-India Business Council, a lobby group that is part of the US Chamber of Commerce, has brought in the Washington-headquartered law firm Covington & Burling to suggest submissions on India’s data protection law.

The firm’s 43-page draft recommendations, seen by Reuters, listed removing data localization requirements as a top priority and called New Delhi’s proposed move a “protectionist approach.”

The US-India Business Council didn’t comment on how it would act on the recommendations of Covington & Burling, which declined comment.
The lobby group’s president, Nisha Biswal, however said India’s draft privacy law was of “great importance,” and that the group would share its concerns with the government directly.


Sweden bans Huawei, ZTE from upcoming 5G networks

Updated 36 min 25 sec ago

Sweden bans Huawei, ZTE from upcoming 5G networks

  • European governments have been reviewing the role of Chinese companies in building their networks
  • Sweden’s security service called China ‘one of the biggest threats against Sweden’

STOCKHOLM: Swedish regulators on Tuesday banned the use of telecom equipment from China’s Huawei and ZTE in its 5G network ahead of the spectrum auction scheduled for next month.
The Swedish Post and Telecom Authority (PTS) said auctions the setting of the license conditions followed assessments by the Swedish Armed Forces and security service.
European governments have been reviewing the role of Chinese companies in building their networks following pressure from the United States, which says they pose a security threat because, among other concerns, Chinese companies and citizens must by law aid the state in intelligence gathering.
Sweden’s security service called China “one of the biggest threats against Sweden.”
The United Kingdom in July ordered Huawei equipment to be purged completely from Britain’s 5G network by 2027, becoming one of the first European countries to do so.
Huawei and ZTE did not immediately respond to requests for comment on the decision by Sweden, home to Ericsson, one of Europe’s leading telecoms equipment suppliers.
“The ban leaves network operators with less options and risks slowing the rollout of 5G in markets where competition is reduced,” said Ben Wood, chief of research at CCS Insight.
The ban is likely to benefit rival telecom equipment makers Ericsson and Finland’s Nokia.
PTS said companies taking part in the auction must remove Huawei and ZTE gear from existing central functions by Jan. 1, 2025.
The regulator defined central functions as equipment used to build the radio access network, the transmission network, the core network and the service and maintenance of the network.
PTS said the license conditions were decided to address the assessments made by the armed forces and security service.
It has approved the participation of Hi3G Access, Net4Mobility, Telia Sverige and Teracom in the planned spectrum auction of 3.5 GHz and 2.3 GHz, key bands crucial for the rollout of 5G.
Tele2 and Telenor will participate together as Net4Mobility to secure spectrum for a joint nationwide 5G network.
Tele2, which uses Huawei equipment in its network, which had earlier called Huawei an important vendor, said the PTS decision “does not change our plans substantially.”
“We may have to phase different costs differently between years to meet security conditions on time,” a spokesman told Reuters.
The 5G spectrum auction was originally planned for early 2020, but last year PTS said it would delay the auction due to a security review. PTS announced in April this year that the auction would begin in November.