As suppliers of public goods (policy relevant research), we at LIRNEasia know the importance of taxes. If there were no taxes, there would be no Internet. Much of the research being done today on multiple aspects of the response to COVID-19 is funded by taxes, including the flood of scientific articles that we are struggling to keep up with. The problem is that taxes have traditionally been levied on businesses located within the boundaries of the nation state. Tax is coercive, so in essence tax collection requires the ability of the state to audit tax declarations and to throw people into jail if they lie to the state or if they fail to pay taxes that are due.
In 2012 we wrote about the dangers posed to cloud computing in our contribution to the 2013 UNCTAD Information Economy Report. When the lower court ruling mandating Microsoft to give the government access to data stored in Ireland came out in 2014, this is what we said. Now the Court of Appeals has ruled in favor of Microsoft: On Thursday, Bradford L. Smith, Microsoft’s president, said the court’s ruling was a victory for digital privacy rights. He added that the adoption of cloud services by customers in some countries, especially in the public sector, had slowed as a result of the uncertainty around the privacy of their communications.
We’ve been writing about the dangers posed by the governments of the places where data are stored wanting access. Now, with US courts trying to exercise extra-territorial jurisdiction, it looks like China might be a safe place? Apple Inc has begun storing personal data for some Chinese users on servers provided by China Telecom, marking the first time that the company has stored user data on mainland Chinese soil. Apple attributed the move to an effort to improve the speed and reliability of its service. It also represents a departure from the policies of some technology companies, notably Google Inc, which has long refused to build data centres in China due to censorship and privacy concerns.
Below is what we said were among critical policy issues in cloud computing: The storage of data in multiple, usually foreign, jurisdictions raises a different set of regulatory issues including data protection and police investigatory powers. The jurisdictional issues are anchored on the location of the firm and the location of the data. In the former instance, wherever the data may be located, the firm may be ordered to ensure that data are subject to the laws applicable to the jurisdiction within which the firm is located. As a corollary, the firm may be required to ensure that the data are located ins jurisdictions where the laws are consistent with those of its home jurisdiction. This was not too difficult a problem in the past because the firms that stored or processed data in foreign locations were large entities with capability to enforce the applicable rules through contracts and otherwise.