Brazil to drop local data storage rule in Internet bill

Brazil will drop a controversial provision that would have forced global Internet companies to store data on Brazilian users inside the country to shield them from US spying, a government minister said.

The rule was added in 2013 to proposed Internet governance legislation after revelations that the US National Security Agency had spied on the digital communications of Brazilians, including those of their President Dilma Rousseff and the country's biggest company Petroleo Brasileiro SA. Instead, the legislation will say that companies such as Google and Facebook are subject to Brazilian laws in cases involving information on Brazilians even if the data is stored abroad, congressional relations minister Ideli Salvatti said. She said the bill, which is opposed by Rousseff allies in the lower chamber of Congress, has enough support to be put to the vote.

Salvatti said the government will not negotiate a key provision in the bill on net neutrality, which has faced strong opposition from telecom companies in Brazil because it would bar them from introducing differential pricing according to Internet usage and speeds, such as higher rates for downloading videos. Regulation of the business aspects of the new legislation can be done later by executive decree, she said. The legislation dubbed Brazil's "Internet Constitution" protects freedom of expression, safeguards privacy and sets limits to the gathering and use of metadata on Internet users.