THE DATA LOCALISATION MEASURES IMPOSED BY THE SOCIAL MEDIA

REGULATION ACT ARE APPLIED IN A MANNER WHICH CONSTITUTES A

MEANS OF ARBITRARY AND UNJUSTIFIABLE DISCRIMINATION.

The measures imposed by the Social Media Regulation Act are far-reaching data localization
measures which impede international trade and is motivated by protectionist impulses. Data
localisation in the context of data services essentially requires B-Connected to duplicate
expensive infrastructure, security and services support in local markets, therefore according less
favourable treatment to B-Connected. Even if data localization measures apply ‘formally
identical’ treatment to B-Connected and Let’s Talk, the measures modify the conditions of
competition in favour of national suppliers, so are considered to be ‘less favourable’ under
GATS Article XVII:3.

B-Connected, as a Baranduin company providing its services in Anduin through mode 1 is

treated less favourably than the Anduin like service supplier Let’s Talk. Anduin undertook
commitments in the service sector relevant to data and message transmission services (as
subsector of telecommunication services), for supply through mode 1 and mode 3. It is therefore
argued that Anduin’s requirement on suppliers of such services to store and process data locally
violates its national treatment commitments

In China–Electronic Payment Services, the Panel emphasized that the national treatment
obligation applies to both de facto and de jure discrimination, and stated that the objective of the
obligation was to ‘ensure equal competitive opportunities for like services of other Members’. 1
By requiring the local storage of data for all service suppliers working with this type of data
(thereby covering a wide range of digital service suppliers), domestic like service suppliers are
provided with more favourable treatment as they will already have the capacity to store and
process personal data in Anduin.

Anduin has inscribed the word ‘None’ in the National Treatment column of its schedule relating
to Cross Border Supply and Commercial Presence in the Telecommunication sector. This is to
say that Anduin has undertaken ‘no’ limitations, in others words, a full commitment with respect
to national treatment in these modes. Henceforth, data localization measures requiring B-

1
Panel Report, China–Electronic Payment Services, para. 7.700.
Connected to seek government’s approval to take copies of date outside the country and only
under exceptional circumstances2 are inconsistent with GATS National Treatment rules.

2
Section 5, Social Media Regulation Act
OPINION OF EXPERTS

As one analyst summarizes, “The notion that data must be stored domestically to ensure that it
remains secure and private is false. In regard to security, while certain laws may impose
minimum security standards, the security of data does not depend on where it is stored, only on
the measures used to store it securely.” 3 It may also be that multinational companies are more
likely to effectively guard their customers’ data than some of the local alternatives.

Peng4 argues that localisation requirements by their nature should be considered as falling within
the ambit of the national treatment obligation, as they amount to a de facto violation of this
obligation, by discriminating against foreign services suppliers.5

Data localisation requirements involve significant costs for foreign suppliers, to establish and
maintain data centres in the territory of the Member requiring data localisation, thereby
modifying conditions of competition in favour of national suppliers and according less
favourable treatment to foreign suppliers.

Anduin has scheduled commitments on the cross-border supply of data services.

3
Castro, Daniel, 2013. “The False Promise of Data Nationalism”, The Information Technology & Innovation
Foundation, December, p. 1.
4
Shin-yi Peng is a Professor of Law at National Tsing Hua University (NTHU).
5
Shin-yi Peng, ‘GATS and the Over-the-Top Services: A Legal Outlook’ (2016) 50 Journal of World Trade 21, 43.