STOCKHOLM (Reuters) – Microsoft Corp will allow commercial and public sector customers in the European Union to process and store all of their data in the region, a growing demand from some clients.

The company will complete the implementation of all engineering work needed to execute the plan by the end of next year and it will apply to all its core cloud services – Azure, Microsoft 365, and Dynamics 365, the company said on Thursday.

Microsoft will consult with customers and regulators about this plan in the coming months, including adjustments that are needed in unique circumstances like cybersecurity, its President Brad Smith said in a statement https://blogs.microsoft.com/eupolicy/2021/05/06/eu-data-boundary.

Microsoft currently operates datacenters in 13 European countries, including France, Germany, Ireland and Sweden.

For big companies, data storage has become so large, and distributed across so many countries, that it becomes difficult for them to understand where their data resides and if it complies with rules such as GDPR.

The European Union’s General Data Protection Regulation (GDPR), which took effect in 2018, is designed to protect the privacy rights of EU individuals and applies to all companies processing or controlling the personal information of EU residents, regardless of where those firms are located.

Microsoft has said previously https://blogs.microsoft.com/on-the-issues/2020/11/19/defending-your-data-edpb-gdpr it will challenge every government request for an EU public sector or commercial customer’s personal data and would provide compensation if it disclosed data in violation of the GDPR that causes harm.

(Reporting by Supantha Mukherjee, European Technology & Telecoms Correspondent, based in Stockholm. Editing by Mark Potter)