Corporate perspectives on consumers’ data privacy?

This Financial Review Story presents a strong anti-regulation perspective as if it’s dominant in the business community. Note the following headline and opening statement, suggesting that ” technology chief executives and experts” agree that the Australian Govt proposed amendments to the 1988 Privacy Act will have a negative impact on consumers. Later in the article the apparently unanimous critique of proposed regulation is countered briefly by an alternative view – supportive of increased data privacy for users, but a laissez-faire approach triumphs .  Where is consumer privacy being addressed in a nuanced way in the Australian media?  

Australian Financial Review.

Privacy restrictions to cost cloud users

PUBLISHED: 15 May 2012 00:04:45 | UPDATED: 15 May 2012 07:18:36

David Ramli

Australian customers will be forced to pay more for cloud computing services if new laws restricting the shift of data overseas are passed, according to technology chief executives and experts.

The prediction comes as federal Attorney-General Nicola Roxon ­prepares to introduce amendments to the Privacy Act 1988 in Parliament.

The final proposals have not been made public but Ms Roxon said on May 2 that the amendments would involve “tightening the rules on ­sending ­personal information outside Australia”.

The move would force global technology providers such as Microsoft to either build local data centre facilities or stop providing certain services to Australian customers. Its Office 365 suite, which provides programs such as Microsoft Word over the internet, is based in Singapore.

German software giant SAP, one of the world’s biggest technology companies with 2011 revenue of more than $18 billion, has welcomed the move.

Co- chief executive Jim Hagemann Snabe told The Australian Financial Review that laws providing more data privacy for users were an important and positive step and that SAP was set to build a local data centre.

“[If the laws are passed], then it is very likely,” he said. “In phase one, we’ll need to run the data centres to learn how to optimise the infrastructure and software. Once we have come to an optimised level we’ll open up to engage with partners.”

Although SAP offers its services through both traditional methods and via the cloud, Mr Snabe warned the rising trend of moving data overseas needed to be better managed.

“It’s good that we rethink and put some requirements and that will fit SAP quite well,” he said. “But then, as you see with the rise of global companies like Rio Tinto, it’s hard for data to stay in specific countries.

“But I think the requirements can be managed without any significant impact on costs.”

Mr Snabe said developing restrictions on where personal data travelled was an important sign of the internet maturing to become more business-focused.

But IDC research director Matt Oostveen said the impact of tighter regulations on where data was kept could reduce the benefits of moving to the cloud.

“The way to look at it is that prices won’t go down,” he said. “We already pay more from an international ­perspective.

“So rather than driving the cost down by allowing Australian end users to participate in the global ­marketplace of services . . . it keeps pricing at a status quo by not opening up competition.”

Mr Oostveen said Australia had a large and mature market, which meant overseas players would be forced to establish local data centres or work with partners like NextDC.

But he added small and innovative start-up firms from overseas would probably avoid Australia because of the increased cost of doing business here.

“One of the biggest threats to the amount of investment we saw in local data centres was global cloud and data centre services,” he said. “If this legislation does indeed pass, it will alleviate the pressure. This gives local providers an incredible shot in the arm.”

Frost and Sullivan principal consultant Andy Woo said it was inevitable that local businesses and customers would end up paying more than users overseas.

“As demand remains constant obviously prices will creep up,” he said. “The challenge will be migrating the data that corporations, small to medium businesses [and end users] currently have overseas back to ­Australia. But I don’t think there will be any major players that leave the local market.”


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