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Bowing to data localization demands, Microsoft to let EU users store all data in the EU

In a major development for the growing demands from countries around the world that tech companies store data about their citizens on their soil, Microsoft said on Thursday that it would start storing European Union user data in the EU. “If you are a commercial or public sector customer in the EU, we will go beyond our existing data storage commitments and enable you to process and store all your data in the EU,” the company said. While this may not apply to home users of services like Windows and Outlook email, most of Microsoft’s revenue comes from enterprise and business users. “This commitment will apply across all of Microsoft’s core cloud services – Azure, Microsoft 365, and Dynamics 365,” Microsoft President and Chief Legal Officer Brad Smith said in a post on the company’s blog.

“Our EU Data Boundary for the Microsoft Cloud will be powered by our substantial and ongoing investments in an expansive European datacenter infrastructure,” Smith said. The policy comes as data transfer issues between the EU and the US are causing headaches to tech companies and regulators. Microsoft pledged in its post that it would work with governments around the world to resolve “lawful” data access issues.

Big Tech companies have long resisted data localization requirements, at different points calling them ineffective or burdensome, even as they stalled for long enough to comply. That is likely to be true in India, whose Personal Data Protection Bill is likely to require companies to keep at least a copy of user data stored on Indian soil. Google indicated last March that it was opening a datacentre region in Delhi because of data localization; this is in spite of the fact that localization requirements are currently localized to select industries like financial services.

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