Finland is aiming to capitalise on Germany’s privacy worries by setting itself up as a haven where online data will be safe from the prying eyes of foreign governments.
Cinia Group, a new state-owned telecoms company, is building a new submarine cable to link the Scandinavian country to German business and digital consumers.
It comes amid growing concern that the EU’s ‘Safe Harbour’ agreement, which allows personal and financial data to be exported to the US, does not protect privacy.
The route of the 685-mile cable has also been carefully planned to avoid waters where it would be more likely to be secretly wire tapped, in an effort to help build German confidence to use Finnish data centres.
The country is bidding to become the “Switzerland of the North”, where sensitive personal and financial data can be safely stored. Cinia has signed up its first customer for the new cable, the data centre provider Hetzner Online, which will pay €10m to use the link from early next year.
German privacy laws are particularly stringent due to its history of secret policing, and public concern about the internet was especially heightened there following the exposure of US spying by the former US intelligence contractor Edward Snowden.
Chris Watson, head of TMT at the City law firm CMS, which advised on the deal, said: “Russia and China keep control of data in government hands – and we saw in the US how personal data was not secure from the spooks. This cable is the fundamental aorta of an entirely secure commercial alternative for keeping data safe.”
Amazon’s data centre business has sought to address German privacy concerns by building a data centre near Frankfurt, guaranteeing that sensitive information will not leave the country. However other internet companies including Facebook have sought to save money by locating data centres in Scandinavia, where cooling for the thousands of server computers they contain is readily available from icy water.