Edward Snowden’s revelation that the U.S. government had been secretly collecting reams of consumer information made it decidedly more difficult for American tech companies to expand abroad, as countries raised concerns about privacy and security.
But tech leaders are hoping that Congress will soon make that path easier if the House on Friday passes fast-track trade legislation, which would help the Obama administration complete pending international trade deals. Tech companies such as AT&T, IBM, Microsoft and eBay have mobilized behind a so-called trade promotion authority (TPA) bill and the Trans-Pacific Partnership (TPP), a trade deal under consideration between the United States and 11 other countries, as both would specifically address intellectual property, data storage and Internet commerce concerns.
“The freedom to move and share data across borders is fundamental to how businesses create great new technologies or meet customer needs,” Victoria Espinel, chief executive of BSA The Software Alliance, said via a spokesman. “The TPP negotiation is an opportunity to achieve for the first time clear, strong, enforceable rules that data should flow freely and forced localization is prohibited.”
Here are five reasons why the tech industry cares about the trade legislation moving through Congress and the trade deals being negotiated by the Obama administration:
- Cross-border data flow
Technology companies constantly push for an open Internet, free of heavy regulation and high barriers to access. Following Snowden’s revelations about U.S. spying, however, a number of countries have questioned whether that openness comes at the expense of privacy.
This issue has been most acute in trade negotiations with Europe, but countries across the globe have weighed privacy measures that restrict where U.S. companies are allowed to move and store their data. TPP could be the first trade deal to seriously address this issue, but even a deal may not fully prevent such regulations from passing.
The Office of the U.S. Trade Representative states the White House is seeking “requirements that support a single, global Internet, including ensuring cross-border data flows, consistent with governments’ legitimate interest in regulating for purposes of privacy protection.”
- Forced localization
Similar to the data flow issue is what the industry calls “forced localization,” or the idea that companies must set up data centers and networks in every area they do business. The advent of cloud computing has made that irrelevant. Data that originates from New Zealand, for example, could be stored on servers in Northern Virginia without slowing down the user’s experience.
But for countries that want to keep their data on home soil or generate jobs for locals, the idea of making local data centers a condition for companies to operate there certainly has appeal. Industry advocates, on the other hand, contend the cost to companies would be crippling and could stifle their global expansion.
Language in TPA and TPP aims to eliminate this threat, asking countries to create “rules against localization requirements.”
- Intellectual property
Much of a technology company’s value is held in its patents. These discourage other companies from ripping off their products and provide the necessary credentials to contest those who try to profit off their inventions.
This is especially true at an international level where companies cannot rely solely on patents issued by the U.S. government. TPA urges negotiators to secure intellectual property rights that are similar to those found in the United States while also protecting emerging technologies so as not to snuff out innovation.
- Copyright protections
There is a push and pull between the creators of digital content and the technology companies that distribute their work over how strong to make international copyright agreements. It’s a debate that has played out here in the United States as well (SOPA and PIPA, anyone?).
For motion picture studios and record companies, pirated content equates to lost revenue. Strong copyright protections help to stymie digital theft and create recourse when it happens. Those who distribute that content, however, want firm fair use provisions to avoid accusations of copyright infringement.
TPP seeks strong copyright protections with “exceptions that allow for the use of copyrighted works for purposes such as criticism, comment, news reporting, teaching, scholarship, and research,” according to the U.S. Trade Representative website. It also advocates for “safe harbor” provisions specifically to protect Internet service providers from such accusations.
- Digital commerce
An increasing number of the products sold overseas are digital – software, music, electronic books, etc. Language in TPA urges any trade agreement to treat these products similarly to physical products, meaning they aren’t subject to additional fees.
The goals of TPP go a step further, saying trade negotiators are asking participant countries not to impose a customs duty on digital products as they might physical goods. That would help tech companies to keep the cost of their digital goods down and allows them to compete more aggressively abroad.