26% of Local Japan Govts Concerned About Cloud Services Provided by Foreign Firms

The Yomiuri Shimbun

17:32 JST, December 5, 2023

A total of 26% of 121 local governments expressed concern about foreign companies providing Japan’s government cloud services that handle personal information and other data held by local governments, according to a survey conducted by The Yomiuri Shimbun.

The reasons for concern include “the handling of information in the case that foreign providers withdraw from Japan” and “a surge in usage fees due to foreign exchange rate fluctuations.”

“Developing domestic cloud services is an urgent matter,” an expert said.

Four major U.S. information technology companies including Amazon. com, Inc. have been selected to manage Japan’s government cloud. Osaka-based Sakura Internet Inc. was selected as the first domestic provider at the end of November. Under such circumstances, the government has no choice but to rely on U.S. companies.

The survey was conducted in November on all prefecture, prefectural capitals, ordinance-designated cities and Tokyo’s 23 wards. Thirty-one of the 121 local governments surveyed said they were “concerned” or “somewhat concerned” about overseas cloud service providers managing the government cloud.

As for the reasons behind their concerns, Nagasaki Prefecture and others said, “It is uncertain how personal information will be handled in the case that foreign providers withdraw from Japan or go bankrupt,” while Osaka Prefecture and others said, “If usage fees increase due to fluctuations of foreign exchange rates, it will have a significant impact.”

Europe and South Korea focus on data sovereignty, which refers to the ownership, management and regulation of data by the country in which it is located, and domestic companies are increasingly responsible for managing domestically stored data.

The Katsushika ward office of Tokyo and others said, “Domestic cloud services are desirable from the perspective of economic security.”

A total of 88 local governments said that they were “not concerned” or “not very concerned,” citing such reasons as, “They meet government safety standards for cloud services,” said Hyogo Prefecture and others.

“One-fourth of local governments expressed concerns, which is a large number,” said Ryoji Mori, a lawyer familiar with personal data protection issues. “The concerns of local governments are not groundless, nor should they be underestimated. Internationally, data sovereignty is becoming a mainstream idea, and the Japanese government should put more effort into fostering domestic cloud service providers.”