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Oct
25

Web Firms Object to Brazil Data-Storage Legislation

From: Wall Street Journal

Proposal Would Require Internet Data on Brazilians to Be Stored in Brazil

By LORETTA CHAO

SÃO PAULO, Brazil—Industry organizations representing the world’s major technology firms sent a letter this week to Brazilian congressmen asking them not to pass a controversial regulation about Internet data storage, citing potentially damaging effects to both Brazilian and foreign companies.

Officials including Brazilian President Dilma Rousseff have been pushing a requirement for Internet data relating to Brazilian citizens be stored in Brazil after allegations surfaced this year that the U.S. National Security Agency targeted Brazilian users, according to documents leaked by former NSA contractor  Edward Snowden. It was later revealed that Ms. Rousseff herself and Brazil’s state-controlled oil giant Petroleo Brasileiro SA, PETR4.BR +1.15%   or Petrobras, may have been targets of spying as well, straining U.S.-Brazil relations and sparking concerns throughout Brazil over the country’s cybersecurity vulnerabilities.

In the letter to congressmen, a number of organizations representing companies including Google Inc.  GOOG -0.74% and Facebook Inc.  FB -0.11% argued that the proposed amendment has negative implications across all industries that make use of cross-border data transfers. “Global data flows rely on data centers dispersed all over the world,” it said, according to a copy of the letter viewed by The Wall Street Journal. “Thus, in-country data storage requirements would detrimentally impact all economic activity that depends on data flows.”

Such a requirement would potentially raise costs for end-users because of additional infrastructure costs to companies and cut Brazilian users off from cloud-computing services hosted in other countries, the letter said.

From the perspective of Brazilian officials, a move to store information locally would give the Brazilian government more control over data about its citizens. It would, for example, give local courts easier access to it.

In a radio interview on Thursday, Ms. Rousseff continued to support the proposal, saying “Brazil defends an open Internet, democratic and neutral, without any political, religious or any other restriction.” Requiring that companies like Google keep files containing data about Brazilians in Brazil instead of the U.S. is “an ‘engineering’ of the Internet to allow us to ensure this is a democratic space to everybody,” she said.

The domestic data proposal would be an amendment to a broader bill called Marco Civil, which may be voted on in Brazil’s Congress as early as next Wednesday. Marco Civil as a whole sets long awaited regulatory guidelines for the Internet industry including requirements about privacy and data storage, freedom of expression, and the treatment of data flows by telecommunications operators.

A spokesman for Alessandro Molon, the representative spearheading Marco Civil, said Thursday that the congressman had received the industry letter but was still reviewing it and declined to comment. He added that Ms. Rousseff’s proposal was still “under discussion” and needed to be further discussed with the president.

The letter was signed by the Information Technology Industry Council and the Software Alliance and over 40 other organizations representing companies from Brazil and the rest of Latin America, Canada, Europe and Asia.

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