Thursday, October 19, 2017

Building a data centre? Data privacy regulations now weigh more than tax reductions

With GDPR to come into force next year, operators are having to re-adapt to the new reality in Europe as governments take data regulation to the next level.

The increasing number of data privacy regulations, both business and personal data, is leading the data centre industry to choose locations for new builds based on regulation and less on tax reductions.

That is according to the “2017 Fact Sheet” published by the Dutch Datacenter Association (DDA) in collaboration with legal advice agency ICTRecht.

The paper says: “Data has quickly become one of the most valuable assets of many companies and organisations. Privacy and the protection of data is a pivotal concern for businesses around the globe.

“The time that businesses let their location choice depend upon national tax laws has already been banned to the past for a long time. Nowadays, the really interesting and valuable good seems to be the protection of privacy and personal data.”

The association has looked at the upcoming changes that will change the data landscape in Europe with the introduction of the General Data Protection Regulation (GDPR) on May 25, 2018.

The GDPR is aimed at creating a, fragmentation free, legal data protection system within all the Member States of the European Union (EU). For companies, the EU will become one large playing field that provides for obstacle free cross-border flows of personal data within the Union, the DDA said.

Taking the Netherlands as an example, the DDA explains that currently, data protection is within the country arranged by the ‘Wet bescherming persoonsgegevens’ (Wbp). However, the Wbp will be replaced by the GDPR once it comes into force.

The DDA warns that privacy regulation compliancy will increasingly become a valuable proposition for any company that handles privacy sensitive data.

Failure to follow the rules in the GDPR could lead to fines of a maximum amount of €20m or 4% of the worldwide annual turnover of a company.

Stijn Grove, managing director of the DDA: “A rapidly growing amount of data is stored within Dutch borders and distributed through the Netherlands to Europe and beyond. Dutch data centres are renowned for their reliability, very thorough privacy and data integrity safeguards and dedication to privacy related certification and compliancy.

“In addition, the broader Dutch digital infrastructure is well suited to serve as Digital Gateway to Europe. These two assets combined, as well as the favourable geographical position of the Netherlands in Europe, make our country a very popular place to distribute data from.

“As a part of the EU Single Digital Market, the Netherlands is ideal for the distribution of data and digital services to other European countries.”