The government should resist the creeping extension of data protection regulation into non-personal data, a City lobby group says today in a warning of growing barriers to international digital trade. In a report Digital trade: a commercially viable approach, TheCityUK warns that the world risks fragmenting into regional and national ‘splinternets’.

According to the report, restrictions on international data transfer have more than doubled since 2017. 'Increasingly, regulators are placing restrictions on commercial and wholesale data', the report says, calling for UK data regulators to work with industry to provide guidance on how to handle cases where it is not clear if data is 'personal' or 'non-personal'. The UK should also work with other countries to shape a 'global data agreement'.

Other measures that would strengthen the UK as a global data hub include avoiding 'domestic localisation measures' such as restrictions on procurement.  

Meanwhile, the government should seek bilateral free trade agreements that prevent unjustified data localisation laws, protect digital intellectual property, prevent customs duties on electronic transmissions and support a risk management-based approach to cybersecurity.

Nicola Watkinson of TheCityUK, said: 'In a highly-digitised world, digital supply chains are just as crucial as physical ones and we must treat any fragmentation just as seriously.

 It is, therefore, essential for the UK to strive to prevent further moves toward international digital protectionism to champion an open approach, refine its data policies, and agree on new bilateral and multilateral partnerships.'