EU Debates Data Retention

New data retention laws in Europe could, if passed, open fresh markets to storage networking firms.

In an emergency meeting of the European Parliament on Wednesday, Britain's home secretary Charles Clarke urged members of the Committee on Civil Liberties, Justice, and Home Affairs to reconsider objections to data retention mandates.

At issue is whether the EU will order telecom service providers and ISPs in Europe to save email and call detail records for at least one year. Last month, the committee rejected a similar request sponsored by the U.K., France, Ireland, and Sweden.

In a press conference late yesterday, EU president Jos Manuel Barroso told journalists the EU will have a plan ready by September. "More than ever, this is the moment to overcome reticence against closer cooperation," Barroso said.

Back in June, members voting on data retention felt they were on shaky legal ground, a view backed by civil liberties groups. And European telecom firms complain that saving large amounts of data would mire them financially and legally. What's more, service providers say that searching the data is problematic even if it can be stored.But in the wake of last week's terror strike in London, Clarke wants the European Commission and other interested parties to think again. "The point I want to make is that the human right to travel on the underground in London on a Thursday morning without being blown up is also an important right," Clarke said.

Barroso's comments reflect a new willingness to act. That doesn't mean they'll adopt the earlier proposal wholesale. "It is obvious that data retention is a crucial instrument in the fight against terrorism: Terrorists need to communicate between themselves, and by doing so leave traces. It is also obvious that data retention raises privacy concerns, and that it has a cost for the industry," Barroso said yesterday. "It is our aim to provide constructive input to ensure that progress achieved so far in the field of data retention will result in a proportionate instrument, based on solid legal grounds."

Part of the EU's plan is to continue to refine a data retention proposal developed separately from the one Clarke backed. The EU proposal asks for data retention on a slightly smaller scale, with storage for a minimum of six months instead of one year. The proposal was spearheaded by EU VP and Italian foreign minister Franco Frattini, who shared the podium with Barroso last night.

During yesterday's debate, it was clear at least a few representatives think asking service providers to save telecom records, instant messages, and email just won't work. "You have our support but you will not get blind obedience. I find very annoying the rhetorical way people use to explain how to fight terrorism.... You argue that intelligence units are the best weapons but they failed in New York, Madrid, and London," said Germany's Alexander Alvaro to Clarke during the debate.

Service providers are balking, too. "The tragic events in London last week should not push a measure which is not fully mature and requires further reflection from a technical, social, economic, and political perspective, for it to be effective," said Michael Bartholomew, director of the European Telecommunications Networks Operators' Association (ETNO) this week.If the Europeans cast tougher data retention laws for carriers and ISPs, that could have a big impact on storage companies worldwide. Other regulations have already generated a market. AMR Research Inc., for instance, estimates that worldwide spending on compliance, including services and products, will be $15.5 billion in 2005. And leading storage vendors are cashing in (see Compliance Services: Get What You Pay For).

If telecom firms in Europe are forced to save more info, that could also affect a small coterie of startups that specialize in searching email and unstructured data. These include Index Engines Inc., Kazeon Inc., and StoredIQ, to name just three (see In Search of... Enterprise Search).

The CEO of Index Engines, Tim Williams, thinks it's likely the European mandates will pass. "The world is becoming digitized. It's inevitable." But he says privacy concerns and the financial burdens of data retention are important issues that must be hammered out as well. Once they are, there's a significant market opportunity for storage vendors.

But Williams isn't booking a roadshow in Europe just yet. Interest in his kind of product, he says, comes after firms get a handle on basic storage and are looking to manage it. His view is shared by Kelly Abner, director of marketing at Kazeon, who thinks the trajectory for search tools has recently risen in North America as companies have gotten their data assembled. "They're looking at how to filter and search what they have," he says.

— Mary Jander, Site Editor, Byte and Switch0