Traditionally the US has been the world’s powerhouse for Internet data centers. We are the global hub of the Internet, and people put servers here. That’s been great for freedom on the Internet, since we don’t censor and strongarm like other countries do.

Well, thanks to Edward Snowden’s propaganda, that’s changing. Russia is demanding that data be stored in Russia, where Putin can gain control, mimicing a similar move by the European Union.

Data centers are the heart of the Internet. Every big Internet company you’ve heard of has computers tucked into them, or builds their own equivalents. These computers store data about users and customers. That’s probably the second most important thing they do, after supplying Web and other Internet interfaces.

So when Putin’s Russia and the European Union are both writing or changing the laws, in order to ban American data centers from hosting data about Russians or European Union member citizens, that has two major effects, neither of which are good.

The first effect is that instead of being under American law (and therefore subject to the alleged abuses in Snowden’s propaganda), these servers will be under EU law and Russian law, and subject to abuses nobody’s talking about. This is bad news for the privacy of anyone whose data is on these servers. The US Government was only looking for Al Qaeda and allies. Putin and the EU are likely to have broader aims.

The second effect is economic. It’s pure protectionism. These laws have the effect of hindering free trade in data centers, subsidizing domestic data center industries. Naturally this is a way that these laws get domestic support: it’s another case of the regulatory-industrial complex in action, as the government picks winners and losers.

So what do we do about it? First, we need the government to recognize that this a big deal, to have an open, lightly-regulated Internet. Next, we need to use the free trade bodies we have, to challenge these restrictions, and find ways to penalize these countries for their anti-American steps, in ways that don’t harm America.

That is, don’t just slap on tariffs ourselves. That just raises taxes on Americans. We need to tailor our payback in ways that hurt them, the elites in Europe and Russia, in a way that’s diplomatically and logistically feasible. Sadly I see no evidence Barack Obama is interested in getting off the golf course even to try.

Photo by Tjebbe van Tijen on Flickr