Mexico Data Protection Law: Use of Equipment Within Jurisdiction

The factor of Use of Equipment Within Jurisdiction is used in determining the law's applicability by extending its scope to data controllers not established in Mexico but using media located in Mexico for data processing purposes.

Text of Relevant Provisions

The Regulations Art.4(1)(iv):

"These Regulations will be obligatory for all processing when: IV. The data controller is not established in Mexico and uses media located in Mexico, unless such media are used only for transit purposes that do not involve processing. For purposes of this subsection, the data controller shall provide the media necessary to comply with the obligations imposed by the Law, its Regulations, and other applicable rules and regulations with respect to the processing of personal data. For this purpose, it shall designate a representative or implement the mechanism that it considers appropriate, provided that by means of this, it is ensured that the data controller will be able to effectively comply with the obligations that are imposed by law on individuals and corporate bodies that deal with personal data in Mexico."

Analysis of Provisions

The Regulations to the Federal Law on the Protection of Personal Data Held by Private Parties in Mexico extend the law's applicability to data controllers not established in Mexico but using media located in Mexico for data processing. This provision ensures that the law covers data processing activities that occur within Mexican territory, even if the data controller is based elsewhere.

Key aspects of this provision include:

1. Use of media in Mexico: The law applies when a data controller uses media located in Mexico for processing personal data.
2. Exception for transit purposes: If the media in Mexico is used solely for transit purposes without involving processing, the law does not apply.
3. Compliance obligations: Data controllers falling under this provision must provide the necessary media to comply with the law's obligations.
4. Representative or mechanism: The data controller must designate a representative or implement an appropriate mechanism to ensure compliance with Mexican law.

The rationale behind this provision is to prevent data controllers from avoiding Mexican data protection obligations by simply locating their operations outside the country while still using equipment or media within Mexico for data processing.

Implications

This provision has several important implications for businesses:

1. Extraterritorial reach: Foreign companies using any form of media or equipment in Mexico for data processing are subject to Mexican data protection law, even if they have no formal establishment in the country.
2. Cloud services: Companies using cloud services with servers located in Mexico may fall under this provision, requiring compliance with Mexican law.
3. Representative requirement: Foreign entities processing data using media in Mexico need to designate a representative or implement a mechanism to ensure compliance, potentially increasing operational costs.
4. Transit exception: Companies merely transmitting data through Mexico without processing it there may be exempt, but the distinction between transit and processing must be clearly established.
5. Compliance strategy: International businesses must carefully consider their data processing infrastructure and whether any elements located in Mexico trigger compliance obligations under this law.
6. Data localization considerations: This provision may influence decisions about where to locate data processing equipment, potentially encouraging some companies to avoid using media in Mexico to escape regulatory obligations.