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US firms will shape prospects for national controls

Thursday, January 15, 2015

Significance

This is the latest incident in which US tech firms have been confronted by non-US governments looking to assert control over how data is managed in their countries. For example, China has blocked Google and its Gmail service and the Russian Duma has passed a bill requiring that the personal data of all Russians be stored inside the country. US firms are likely to confront increasingly active governments and changing regulatory frameworks in the next year.

Impacts

  • As the commercial value of data increases, governments will champion national competitors to US-based firms.
  • This could manifest itself through preferential purchasing arrangements, as in China, anti-monopolistic lawsuits or investment agencies.
  • Although US firms are unlikely to see direct governmental support, they will benefit from Pentagon and intelligence contracts.
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