The European Commission in May unveiled its strategy for a single digital market, as it aims to get the new data protection rules adopted by the end of the year. At the same time, it also proposed a "European free flow of data initiative" to promote the free movement of data in Europe.
To mitigate European privacy concerns though, many U.S. cloud companies are opening locations in various EU countries. Amazon Web Services for instance opened a second European location in Frankfurt last year to address privacy concerns. Other companies like Salesforce, VMware and Oracle are also opening data centers in Germany.
Privacy is not the only reason to do that though. Opening local branches allows providers to be closer to their customers, which helps reduce latency and improve reliability.
But as an ongoing case involving Microsoft shows, storing EU customer data in Europe doesn't always innoculate U.S. vendors from the long arm of the U.S. government.
In that case, Microsoft is refusing to comply with a search warrant issued by the U.S. Department of Justice to turn over a suspect's emails stored on a server in Ireland. Microsoft argues that U.S. laws do not apply in Ireland.
Its argument was backed in December by companies including Apple, Amazon.com, AT&T, eBay and Verizon Communications, all of which warned the case could impact the willingness of customers outside the U.S. to do business with American tech companies.
That trust was already severely damaged when documents leaked by former U.S. security contractor Edward Snowden revealed the extent of U.S. spying programs. After that, the European Commission demanded the renegotiation of the Safe Harbor agreement that regulates the commercial transfer of personal data of EU citizens to the U.S.
A new deal with better protections for EU citizens' data seems close, but some issues still need to be ironed out, including a clarification about the scenarios in which the U.S. government would demand access to data from EU citizens.
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