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Safe Harbour seems more like a rough sea

Date: 12th July 2016
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The impact of last months’s unexpected referendum result is yet to be fully defined, however it is likely to affect all of us in the data centre world and possibly acerbate some of the challenges ahead. The issues around the ‘Safe Harbour’ agreement is just one example of the confusion that we are facing, and are likely to continue to face, in the coming months.

It was last October that The European Court of Justice ruled that the “Safe Harbour” agreement, which was designed to provide a “streamlined and cost-effective” way for US firms to get data from Europe without breaking EU rules, was no longer valid. The result following the ECJ decision was several months of confusion and in some cases panic before the Privacy Shield Pact was introduced instead. The main difference is that US companies can no longer rely on self-certification and must seek to strike “model contract clauses” in each case. These agreements will then authorise the transfer of data outside of Europe.

The UK’s decision to leave the EU means that we will no longer be bound by decisions of the ECJ and we are likely to have to create our own regulations. However I don’t believe we should ignore its findings or the views of European Data Protection Supervisor Giovanni Buttarelli, who criticised the Safe Harbour’s replacement describing it as ‘not robust enough’ and needing ‘significant improvements.’ The UK will need to factor these in to ensure that its citizens’ personal information remains safe.

There is no doubt that the UK’s decision to leave the EU has added instability to an already uncertain market. Before the results of the referendum were known CBRE’s quarterly review of data centre supply and demand in Frankfurt, London, Amsterdam and Paris, reported that the amount of data centre space taken up during the first quarter of 2016 was well above average leaving spare capacity in short supply. In fact the amount of spare data centre capacity in four major European cities is at its lowest level since the end of 2013, as cloud providers respond to user demand for locally hosted services.

The report suggests that this is in part due to the uncertainty surrounding the successor to the Safe Harbour US data transfer agreement which is motivating more IT infrastructure firms to consider data centres in Europe. Whilst this is understandable it is likely to increase costs which will ultimately be passed along the supply chain.

At Keysource we are working closely with our clients who are affected by these issues and helping them to continue to operate cost effectively and remain compliant during this difficult time.

This was originally published on Data Centre Solutions blog on the 6th July 2016.

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