Thursday, October 08, 2015

EU ruling: reminder of regulatory risk for firms relying on big data

On Tuesday , October 6th, the European highest court struck down a transatlantic pact that allowed thousands of companies to transfer personal data of European citizens to the United States. The court ruled that national regulators can override the 15-year old "safe-harbor" pact, as it exposes European citizens to indiscriminate surveillance by the US government. As billions of dollars of digital marketing depend on personal data, this ruling poses a threat to many businesses relying on this kind of ad spending.

Even though the ruling came as a surprise, most of the largest companies are prepared to dealt with the aftermath of this ruling. Google and Amazon, for example, have already set up data centers in Europe, allowing them to store the data locally.

However, for many smaller businesses, this ruling can pose a serious threat to their profitability as opening European data centers could easily double their operating costs.

Whatever happens further, the event reminds us of the regulatory risk for companies that rely on big data.

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