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Why is Big Tech treating India as its colony?

India is Facebook's largest market and the largest data mine.


The only data center in South Asia is in Singapore. India has since boycotted a statement on data flows, arguing that big tech companies still maintain a colonial attitude towards emerging economies, focusing on our data rather than development. There is a global conflict over who stores your data. At the end of the G20 summit in June in Japan, some developing countries refused to sign an international statement on data flow - the so-called Osaka Track.

One reason why countries like India, Indonesia, and South Africa boycotted the statement was that they had no opportunity to include their own data interests in the document. With 50 other signatories, the statement is still an explanation of future negotiation intentions, but the boycott is a continuing struggle by some countries to assert their claim to data generated by their own citizens.

Back in the dark days of 2016, data was touted as the new oil. Although the metaphor was quickly exposed, it is nonetheless a helpful way to understand the global digital economy.

In the face of increasing international data flow negotiations, oil comparison is now helping to explain the economics of so-called "data localization" - the desire to keep citizens' data in their own country. As oil-producing nations urged oil refineries to add value to crude oil, governments today want the world's big tech companies to build data centers on their own ground.

The cloud, which powers much of the global technology industry, is based on huge data centers located mainly in Northern Europe and the US coasts. At the same time, US big-tech companies are increasingly turning to the markets of the global South to expand as an enormous number of young tech-savvy populations go online.

Allegations of "digital imperialism"

Take, for example, the case of Facebook.

Digital Imperlism

While India is the country with the largest number of Facebook users, ten of Facebook's 15 data centers have ten in North America, four in Europe and one in Asia - in Singapore. This separation between new data sources and the location of data centers has led to accusations of "data colonization" and "digital colonialism" in countries such as India.

The economic argument for countries in the Global South to host more data centers is that digital industrialization would be promoted by creating competitive advantages for local cloud companies and developing links with other parts of the local IT sector. Many countries have flirted with regulations about what type of data should be stored locally.

Some only cover specific sectors, such as health data in Australia. Others, such as South Korea, require the consent of the person associated with the data to be transferred overseas. France continues to run its own data center infrastructure called "le cloud souverain", although some of the companies that originally supported the idea were shut down. The most comprehensive laws exist in China and Russia, which require cross-sectoral localization for many types of personal data.

Countries such as India and Indonesia, with their massive and growing online population, are likely to have the biggest economic benefits as they currently receive the least investment in data infrastructure from the technology giants in proportion to the number of users.

The economy is not unique


Proponents of data localization rely on developing countries' structural reliance on the foreign-owned digital infrastructure and an unfair share of the economic benefits of the industry. They dream of using data localization to turn tech companies into permanent units on home soil, eventually increasing the amount of taxes they can impose on them.

Critics point to the high business costs of local servers, not just for the technology giants, but also for the very digital start-ups that governments want to encourage. They say that localization regulations are hindering global innovation, hard to enforce, and ignoring data center technical requirements: the proximity to the fiber's "backbone" of the Internet, a stable power supply, and low-temperature air or water to cool the computer's huge server.

The attempts to measure the economic impact of localization are extremely biased. The most cited study from 2014 is based on an opaque methodology and was prepared by the European Center for International Political Economy, a Brussels-based think-tank for free trade, some of whose funding comes from unknown multinationals. Not surprisingly, there are significant losses for countries considering localization.

However, a Facebook-commissioned 2018 study found that spending on data centers in the US created tens of thousands of jobs, supported renewables, and provided US $ 5.8 billion in GDP in just six years.

Like the corresponding arguments for and against free trade, a dogmatic position for or against the subject hides other complexities on the ground.

The economic costs and benefits depend on the type of data stored, be it a duplicate or the only copy, the amount of state support for more comprehensive infrastructure aid, to name but a few.

India was the loudest proponent of localization and promoted its own regulation as a blueprint for developing countries. However, given the country's relatively advanced digital industrialization and technical workforce, it is in a strong position to do so. Other emerging economies with large online populations, such as Indonesia, are under pressure from the US government to use restrictive rules to create preferential trading conditions for other goods and services.

What governments do with the data?

While the international personal data economy is about as dynamic as oil production, data is fundamentally different from oil production as it fulfills a dual-duty - not just monetary value for companies but also monitoring opportunities for governments.

Some civil society activists I've come across as part of my research in India and Indonesia told me that they were skeptical of their own government's reports on data colonialism and instead worried about the increased access to sensitive personal information that localization could bring governments granted.

It's not just big companies and states that play a role in this "data sovereignty" offer. Tech developers may still find ways to support individuals' rights to control their own personal information with platforms such as the data box, which gives each of us something that resembles our own personal servers.

These technologies are still evolving, but projects are being created - mostly across Europe - that will not only give people more control over their personal data but also bring social value rather than profit.

Such experiments could still find a place in developing countries, alongside what states and big companies do.

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