Data Localization: The Causes, Evolving International Regimes and Korean Practices

Abstract

As control of information is the primary source of power in the information society, countries, corporations, and individuals are eager to gain control over more data and information and to hand over less of them to adversaries. National experiences show that there are some incentives for a country to move toward data localization. Some of the localization measures may be consistent with the current state of free-trade agreements such as the World Trade Organization’s General Agreement on Trade in Services. Even international trade agreements on the horizon, such as the Trans-Pacific Partnership and Trade in Services Agreement, allow some room for data localization. Drawing the fine line between prohibited and permitted data localization measures should wait for the future development of case law and state practice. Non-violation of the current international agreements, however, does not guarantee the best policy. Data localization tends to cause Galapagos syndrome, in which a short-term comfortable life in isolation leads to long-term extinction. This is particularly true in the market for electronic commerce, which is by its nature global rather than local. Data localization is a temporary abnormal phenomenon that occurs in a transient situation in which internet service providers fail to meet their social responsibility toward the community where the customers exist and incipient cooperation among national legal authorities fails to tackle the trans-border problems effectively.