| SAO PAULO/BRASILIA
SAO PAULO/BRASILIA Oct 28 Brazil, seeking to
shield its citizens from alleged U.S. spying, is pushing ahead
with its plan to force global Internet companies to store data
obtained from Brazilian users inside the country, according to a
draft of the law seen by Reuters.
Despite opposition from multinational software, hardware and
telecommunications companies, President Dilma Rousseff is
pressing lawmakers to vote as early as this week on the law,
sparked by disclosures of widespread U.S. spying on Brazilian
If passed, the new law could impact the way Google,
Facebook, Twitter and other Internet giants operate in
Latin America's biggest country and one of the largest
telecommunications markets in the world.
A draft of the law says "the government can oblige Internet
service companies ... to install and use centers for the
storage, management and dissemination of data within the
The government would evaluate the requirement for each
company, the draft says, "taking into consideration their size,
their revenues in Brazil and the breadth of services they offer
the Brazilian public."
Rousseff's insistence follows disclosures of surveillance by
the United States in Brazil that went as far as tracking the
personal phone calls and emails of Rousseff herself.
It follows recent reports of similar U.S. spying on the
leaders and citizens of Germany, France and dozens of other
The disclosures, like the reports of surveillance by U.S.
intelligence agencies on American citizens and businesses, come
from documents leaked by Edward Snowden, the former contractor
for the U.S. National Security Agency.
The spying has given Rousseff, a leftist who is expected to
run for another four-year term in 2014, a cause celebre to
pursue both at home and on the international stage, especially
after Germany said it would back a Brazilian proposal at the
United Nations that would seek to strengthen international rules
for Internet governance and put limits on foreign surveillance.
Brazil will host a conference in Rio next April to discuss
ways to guard Internet privacy from espionage. The meeting will
be held by ICAAN, the body that manages web domain names and is
considered neutral by many because it includes governments,
civil society and industry.
First, though, comes the focus on Brazilian data.
Proponents of the law say in-country data centers would make
companies answerable to local privacy rules and other Brazilian
laws. They dismiss industry fears that the law would make online
activities costly and inefficient and create unnecessary
barriers in what is supposed to be a frontier-free Internet.
"We are not regulating the way information flows, just
requiring that data on Brazilians be stored in Brazil so it is
subject to the jurisdiction of Brazilian courts," Rousseff
spokesman Thomas Traumann said. "This has nothing to do with
Given the outrage felt by many Brazilian lawmakers after the
disclosures of American spying, Traumann added, the government
is confident it has enough votes to pass the bill. Brazil's
lower house of Congress is expected to vote on it as early as
Internet companies have been lobbying hard to try to stop
what they see more as a political reaction to U.S. spying than
an effective measure to ensure data protection.
Last week, a coalition of business groups representing
dozens of Internet companies including Facebook, Google,
Microsoft and eBay sent a letter to Brazilian
lawmakers. "In-country data storage requirements would
detrimentally impact all economic activity that depends on data
flows," it read.
Industry sources say forcing companies to have in-country
data centers will not address Brazil's privacy concerns, because
the same information will be replicated in servers abroad.
Instead, they warn, it could scare companies away, depriving
Brazilians of services and causing problems for industries, like
finance and air travel, that rely heavily on data storage.
By some calculations, taxes and high costs of energy make
data centers in Brazil up to 100 percent more expensive than in
the United States, costing an estimated $200 million.
But the government argues the size of the market justifies
having part of the infrastructure in the country, especially
when companies like Google, which recently built a data center
in Chile, are already setting it up nearby.
"The Brazilian market is huge," a senior official said.
"There is a consensus within the government that if the market
is here it makes sense to have the data centers here too."
Some in the industry believe big companies would eventually
comply, if given no choice.
Others, however, say companies could skip Brazil or choose
to operate remotely. That's especially true for companies that
don't already have a physical presence in Brazil because the
law, according to the draft, would apply to foreign companies
with offices in the country.