New data storage demands may put companies off Brazil

Brazilian IT trade body issues warning against upcoming regulations

As politicians get ready to vote Brazil's first set of rules to govern the internet , the country's IT trade body Brasscom warned that the regulations may hurt the local economy in many ways.

According to Brasscom, the mandatory local data storage provisions of the Marco Civil da Internet , due to be voted by the House of Representatives tomorrow, will mean an increase in costs incurred by local IT companies and prompt these firms to move their operations elsewhere.

Companies such as Facebook and Google have already expressed concern about the upcoming laws.

"This obligation may drive citizens, businesses and other institutions run the unnecessary risk of being excluded from the enormous potential of the digital economy, hurting the country's ability to create, innovate, create jobs and collect taxes from the proper use of the Internet," Brasscom says, in a letter sent to the House of Representatves, the Senate and president Dilma Rousseff.

Earlier this year, Brasscom had predicted that the Brazilian IT industry would grow by 7.3 percent on last year's figures. But the association is worried that the possibility of requirements for local data storage could put a spanner in the works, with  other countries introducing reactive policies that would affect exports of technology services from Brazil.

"In reverse motion, [these requirements] can stimulate the migration of datacenters based here, or at least part of them, to other countries, with a possible loss in terms of tax revenues and job creation," says the Brasscom letter.


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