Double-Sided Cross-Border Data Flows

 written by 10219 Lee Hyunseo

As the Internet develops, digital trade becomes more active. Digital trade is the transaction of goods and services through the Internet. It handles not only digital products like drama series but also physical goods like clothes.

So, ordering jeans online and receiving them at home is also a digital trade.

Although digital trade has the advantage of getting the products you want with just a few clicks from home, it has many problems. These problems include information leakage and the complexity of work in cross-border data flows.

Cross-border data flows are the movement of data across countries.

If you create an account on a new website where the corporation is headquartered in another country and use it, the result is a cross-border data flow.

As corporations collect data, they analyze consumer’s preferences. So they can provide better-customized services to consumers.

However, not every corporation uses data in the right way. Some choose to sell private information. This is possible because each country has different laws regulating the management of data.

While one country doesn’t allow corporations to use data freely, another won’t restrain them with data management.

Temu, a Chinese corporation, records device data, service usage information and location data automatically. It uses them as promotional data on other websites. Consumers can not know exactly where their data is being used.

Excessive complexity is another result of cross-border data flows.

Private corporations try to comply with the laws of different countries. So, they look up different laws and additional costs are generated.

In 2022, the Organization for Economic Cooperation and Development said that the different policies and regulations about cross-border data flows created additional costs and operational complexity.

They also mentioned that non-unified laws caused disputes and confusion among corporations and governments.

To solve these problems, many private corporations enhanced the level of their data management systems while international organizations try reaching a consensus about data regulations.

Private companies make efforts to: encrypt data, comply with legal requirements, strengthen corporate data security and so on.

Apple uses data encryption in services such as iCloud to strengthen data protection. Data is encrypted both during transfer and storage, ensuring the security of user data.

The UN is currently drafting the Global Digital Compact with the help of many governments and experts. The first draft, which came out on May 15, called for the promotion of digital trust and security.

Although countries and private companies are making an effort, they cannot solve this problem alone. Individual consumers must be involved in this issue and move to urge the protection of our information.