The ultimate compliance guide for data sovereignty

A complete guide to the latest regulations around data sovereignty, compliance with regulations, and increasing user adoption.

How-to-stay-compliant-with-increasing-data-soverignity-regulations-hero-landing-page

How to stay compliant with increasing data sovereignty regulations

This whitepaper takes a closer look at the concept of data sovereignty. Data sovereignty refers to all the data generated in an organization subject to the laws and regulations of the country where it is collected. This area is rapidly evolving in today’s regulatory landscape, and organizations must now navigate new and emerging national data privacy and protection regulations.

In this whitepaper, Pexip offers an overview of some of the most essential data regulations in the world today, as well as recommendations and critical considerations to make to achieve compliance.

The data sovereignty turning point: how did we get here?

The turning point for data sovereignty and its subsequent adoption was likely in 2013 when Edward Snowden came onto the global stage. Edward Snowden is responsible for one of the most well-known privacy breaches of the past two decades. This incident is often considered the moment that most of the world’s population realized their conversations and messages weren’t that private.

In the years since Snowden, many high-profile people and organizations have been the victims of data breaches and cyber-attacks, contributing to greater awareness about protecting sensitive data.

With the onset of the war in Ukraine, governments are also acknowledging the importance of data protection to national security. Many nations are seeking ways to reduce the risk of foreign interference or espionage, and this need has only grown in today’s climate of increasing geopolitical tension.

The world has become increasingly digital and interconnected, and nation-states see data sovereignty as a means of ensuring the compliance of those handling data within its borders through tighter regulation of how that data is stored and shared.

New and evolving regulations have emerged to build greater cyber resilience within regions and countries, from NIS2 to the AI Act in the European Union. Both are designed to help organizations manage and reduce risks and protect their data in the age of digitalization and more pervasive AI.

Vital factors driving data sovereignty

Several factors contribute to data sovereignty's increased prominence on the national and corporate agendas. Here is an overview of some key driving factors for organizations today.

Data privacy concerns

With increasing concerns about data privacy and the protection of personal information, many regional organizations seek solutions that allow them to store and process data within their borders rather than relying on third-party providers based in other countries.

Compliance with local regulations

Several data protection regulations in Europe and other regions impose strict requirements on handling personal data. By using sovereign-based collaboration solutions, organizations can ensure that they fully comply with these regulations.

Cybersecurity risks

As cyber threats continue to increase, organizations seek solutions that can help mitigate the risks associated with storing and transmitting sensitive data. Sovereign-based collaboration solutions can address these risks by giving organizations greater control over their data and the ability to secure it within their borders.

Cost savings

For some organizations, a sovereign-based collaboration solution can be more cost-effective than a third-party provider, eliminating the need for data storage and transmission costs.

Competitive advantage

For some organizations, using a sovereign-based collaboration solution can provide a competitive advantage, as it can help them better protect their intellectual property and sensitive business information.

Data protection, privacy, and cybersecurity regulations shaping our digital world

Several significant regulatory milestones over the past decade have elevated data privacy, protection, and cybersecurity to the top of most corporate agendas. These regulations have contributed to a strong focus on data sovereignty, supply chain management, and business continuity. Here is an overview of some of the most prominent and impactful regulations globally so far:

NIS2 Directive

The NIS2 Directive provides EU-wide legislation on cybersecurity and is a response to the growing threats from various types of cyberattacks, ransomware and data breaches. The objective is to create a standard level of cybersecurity across the European Union Member States, harmonizing measures and approaches to establish a more cyber-resilient region.

NIS2, successor to NIS1 from 2016, is a landmark cybersecurity directive that broadens the scope of organizations impacted by it. The updated directive now applies to a wide range of essential and important sectors. Here is the breakdown to determine where you fit in:

Essential sectors: Energy, health, transport, finance, water supply, digital infrastructure, public administration, space.
Important sectors: Digital providers, postal services, waste management, food, manufacturing, chemicals, research.

Organizations in essential and important sectors must adhere to several key requirements under NIS2. This is a high-level overview of those requirements:

Risk management: Implement measures to manage your cybersecurity risks and minimize any impact from potential threats.
Incident reporting: Report significant threats within 24 hours of detection.
Supply chain security: Ensure cybersecurity practices are maintained across your supply chain.
Business continuity: Have plans to maintain and restore essential services during and after a cybersecurity incident.
Senior management accountability: Top management is responsible for and involved in cybersecurity compliance.

Artificial Intelligence Act

The EU approved the AI Act in 2024, marking a significant milestone as the world's first comprehensive legislation to regulate AI. The AI Act follows a risk-based approach to ensure AI's safe and ethical use across the EU. It emphasizes the control and protection of personal data.

General Data Protection Regulation (GDPR)

The GDPR is a comprehensive data protection regulation for all European Union (EU) organizations. It sets out strict rules for how personal data must be collected, processed, and stored and gives individuals significant rights regarding their personal data.

ePrivacy Regulation

This regulation sets out specific rules for the processing of personal data. In the context of electronic communications, such as email and instant messaging. It places additional restrictions on the use of cookies and similar technologies. It sets out rules for using electronic communication for direct marketing purposes.

Health Insurance Portability and Accountability Act (HIPAA)

For organizations operating in the healthcare sector, HIPAA sets out strict rules for protecting personal health information (PHI), including requirements for the secure transmission of PHI over video collaboration platforms.

NCSC 14

These are the UK National Cyber Security Center’s cloud security principles. There are 14 principles in total, and they are designed to help U.K.-based organizations select a cloud provider that complies with their security needs. These principles cover data in transit protection, separation between customers (by creating security boundaries), and personnel security to constrain personnel actions, to name a few.

CLOUD Act

The Clarifying Lawful Overseas Use of Data Act (CLOUD) is a U.S. federal law that allows U.S. law enforcement agencies to access data stored by U.S. technology companies, even if that data is stored outside the United States. The act also provides a framework for foreign governments to request access to data stored in the United States, subject to certain conditions.

Key considerations to stay compliant

Data protection and privacy

Ensure that all data being shared is protected and kept confidential, following any relevant regulations such as GDPR or HIPAA. This means implementing proper access controls, encryption, and audit trails to protect sensitive information.

User authentication and authorization

Make sure that only authorized users have access to the information being shared. This can be achieved through implementing robust authentication mechanisms, such as multi-factor authentication, and by carefully managing access permissions.

Device security

Ensure that all devices used for collaboration are secure and updated with the latest security patches. This includes laptops, smartphones, and other devices that may be used to access sensitive information.

Network security

Ensure that all communication channels are secure and protected from hacking, eavesdropping, and other forms of tampering. This can be achieved using secure protocols, such as SSL/TLS, and by implementing firewalls, intrusion detection systems, and other security controls.

Continuous monitoring and audit

Monitor and audit the collaboration platform and systems regularly to ensure that they operate securely and comply with relevant regulations. This will help identify security incidents and vulnerabilities, allowing them to be addressed before they can be exploited by malicious actors.

Vital factors driving data sovereignty trend

Several factors contribute to data sovereignty's increased prominence on the national and corporate agendas. Here is an overview of some key driving factors for organizations today.

Data privacy concerns

Compliance with local regulations

Several data protection regulations in Europe and other regions impose strict requirements on the handling of personal data. By using sovereign-based collaboration solutions, organizations can ensure that they fully comply with these regulations.

Cybersecurity risks

Cost savings

For some organizations, a sovereign-based collaboration solution can be more cost-effective than a third-party provider, eliminating the need to pay for data storage and transmission costs.

Competitive advantage

What are the consequences of

non-compliance?

Non-compliance with data protection-related regulations can result in various risks and consequences for organizations. These risks may
vary depending on the specific rules in place and the severity of the violation. Here are some of the more common risks:

Fines: In some nations, regulatory authorities impose penalties for improper data storage and sharing. In the EU, a lack of compliance with NIS2 regarding proper risk management and incident reporting can lead to significant fines, as much as 2% of an organization's annual revenue.
Personal liability: To ensure that top management takes an active role in managing their organizations' cyber resilience, NIS2 in the EU holds top leaders personally liable in the event of a breach or cyber-attack if they have not taken appropriate measures to protect the organization.
Reputation damage: Non-compliance can make organizations more vulnerable to a data breach, which can erode the trust of customers, partners, and other stakeholders.
Loss of business opportunities: Failure to comply with data regulation can lead to restricted market access, meaning a failure to do business within certain national borders.
Security risks: Without proper protections in place, in line with regulation, organizations increase their vulnerability, which may lead to unauthorized access to their data and the potential exposure of sensitive information.
Legal action: When data is mishandled, it is subject to legal action by the company or individual whose data was mishandled. This can lead to lengthy processes, high fees, and a reputational loss.

What evolving regulations mean for video conferencing

Compliant solutions

With continually evolving and tightening regulations, it’s essential to focus on compliance in your organization and across your supply chain. Look for video conferencing vendors that offer compliant solutions to meet current regulatory requirements that can fit future regulations. Supply chain security is a critical requirement in the EU’s NIS2 directive.

Compliant solutions

Greater data control

Data privacy and protection are critical elements of global and emerging digital regulation. This requires a video conferencing solution that can offer complete data control, whether the AI data from the meetings or the meta-data surrounding it, detailing names and locations. Seek solutions that can provide on-premises or private cloud deployment to ensure your data always remains within control.

Greater data control

Business continuity enabler

Communication becomes critical for business continuity in the event of a crisis or cyber incident. Select a video conferencing solution that can remain operational despite an attack, system failure, or other critical situation. Consider a backup video conferencing solution that can serve as your fail-safe should your daily video meeting system fail.

The ultimate compliance guide for data sovereignty

How to stay compliant with increasing data sovereignty regulations

Jump to section

The data sovereignty turning point: how did we get here?

Vital factors driving data sovereignty

Data privacy concerns

Compliance with local regulations

Cybersecurity risks

Cost savings

Competitive advantage

Data protection, privacy, and cybersecurity regulations shaping our digital world

NIS2 Directive

Artificial Intelligence Act

General Data Protection Regulation (GDPR)

ePrivacy Regulation

Health Insurance Portability and Accountability Act (HIPAA)

NCSC 14

CLOUD Act

Key considerations to stay compliant

Data protection and privacy

User authentication and authorization

Device security

Network security

Continuous monitoring and audit

Vital factors driving data sovereignty trend

Data privacy concerns

Compliance with local regulations

Cybersecurity risks

Cost savings

Competitive advantage

What are the consequences of

non-compliance?

What evolving regulations mean for video conferencing

Compliant solutions

Compliant solutions

Greater data control

Greater data control

Business continuity enabler

Business continuity enabler

Download the guide to continue reading