An Examination of Data Localization: A focus on its impact on businesses and policy objectives

Data localization measures, which are widely recognized as a key issue in international data transfers, are gaining increasing importance as data volumes continue to grow. In various emerging countries and regions, policymakers are proposing a range of tools to implement data localization measures, which can impose economic burdens on globally operating companies. This paper aims to organize the policy objectives underlying data localization measures, highlighting their diversity and providing an overview of their impact on businesses. Furthermore, it explores the possibility that data localization may not always align with specific policy objectives and investigates the availability of less restrictive alternative measures. Regarding policy approaches to data localization, this paper underscores the significance of aligning with relevant provisions in trade rules and maintaining a stringent stance on the introduction of data localization measures. Additionally, the paper emphasizes the importance of assessing policy effectiveness based on its impact on businesses and proposing less restrictive alternatives.