Germany's data storage laws are similar to those of China and Russia, according to a US tech think tank. The Information Technology & Innovation Foundation (ITIF) released a report this week stating that Germany's data storage law was a potentially damaging hindrance to free trade. 

The 2015 law change forced telecom companies to store metadata locally in Germany, rather than any other country. This amendment is seen as a law that violates rules that protect the freedom of services, the free flow of personal data. 

The ITIF believes that foreign companies that store data in their home countries would necessarily be shut out of the German market. 

Not all the people think this law hurts free trade

Some German economists were skeptical about the negative effects of this data storage law. Barbara Engels, digitization specialist at the Cologne Institute for Economic Research, seemed surprised by the ITIF's declaration.

The specialist stated that she doesn't really see a problem the way the ITIF does. Then, she added that she doesn't really see exactly how it should hinder innovation.

Dirk Dohse, of the Kiel Institute for the World Economy, declared: The argument of this think tank seems to be that foreign companies are being denied access to the German market, and that is a form of mercantilism. He believes that the think tank made it a little sensationalized. 

The importance of moving data

Nevertheless, the ITIF insisted that companies must be able to move data across borders because it is a critical component of value creation for companies in the world. 

The ITIF report pointed out that countries like Australia and the UK have similar data retention rules, but do not stipulate where the information has to be kept.