The European Commission has announced a new set of standard contractual clauses to be used in agreements with processors located outside the EU / EEA. The new SCCs represent an effort to better ensure privacy protection when European personal data are passed on to subcontractors in business process outsourcing, cloud computing, and other contexts of successive data sharing.
Data integrity is a potential challenge in cloud computing, with implications for both operational efficiency and legal evidence. Vendors should consider a standards-based approach to assuring data integrity, and customers should address the issue in due diligence and in contracting.
In honor of Data Privacy Day and its spirit of education, I thought it might be appropriate (and fun) to celebrate some (but certainly not all) of the A, B, Cs of Data Privacy. Would love to see your contributions, too!
Service contracts that involve protected personal information should include provisions allocating responsibility for protecting that information and responding to security breaches. Increasingly, this means incorporating specific references to applicable laws and information security standards, and often certifications of conformance.
My former colleague and friend Nolan Goldberg has written this nice piece on "Securing Communications in the Cloud" regarding the Central District of Illinois decision in US v. Weaver (yet another child pornography case contributing to the development of information law). Nolan points out the Weaver court's focus on the unique nature of web (or cloud)-based email services. With webmail, a copy stored by the host in the cloud, in this case Microsoft Hotmail, might be the only copy, not just a backup. Therefore, the logic goes under the Stored Communications Act, the emails sought by the government in Weaver were not in electronic storage and the government only needed a trial subpoena, not a warrant.
Back by popular demand, this is Part Four in our ongoing series, Legal Implications of Cloud Computing. This installment will focus on digital evidence and e-discovery, and follows up on Part One (the Basics), Part Two (Privacy), and Part Three (Relationships). After all, what better topic than the cloud to tackle on the day after Thanksgiving, recovering from tryptophan and wine? As with many other areas previously discussed in this series, the cloud does not necessarily change the legal analysis, it just highlights the need to think through and anticipate the many areas of legal concern that could/are likely to arise when using the cloud. As a litigator, when I think about the challenges posed by the cloud, the one that seems most intuitive is e-discovery/digital evidence. It is always difficult to fully appreciate and digest the scope and volume of information that may be called for in litigation or in an investigation. The presence of corporate data in the cloud multiplies those considerations. Some, but by no means all, of the digital evidence issues that should be considered in negotiating cloud arrangements and contracts (whether you are putting data in the cloud or designing and marketing a cloud offering), are as follows: 1. preservation/retention/disposal; 2. control/access/collection; 3. metadata; 4. admissibility; and, cutting across all of the foregoing 5. cost. As I will discuss below, like other forms of electronically stored information (ESI), one of the best ways for addressing data in the cloud in the discovery and evidentiary context is to plan ahead and discuss treatment of cloud data (a) in records retention policies well in advance of litigation; and (b) at the Rule 26 conference once litigation has commenced. And, if you read to the end, I will comment on the paucity of case law referencing the cloud (and describe the few references that have appeared in federal and state case law to date).
Cloud computing promises incredible benefits for companies looking for inexpensive and scalable computing solutions without the need (or the costs or employees) to do it all themselves. However, as foreshadowed in the InfoLawGroup's "Legal Implications of Cloud Computing" series (see Part One, Part Two and Part Three) data security, privacy and legal compliance issues are beginning to cause great concern. Stories like this highlight these concerns. High profile information security snafus (fairly or unfairly) have also stoked the fire: Rackspace power outage, Amazon denial of service attack, and the Sidekick Data Loss. Data leakage is maybe problematic as well based on Cloud architecture. In fact, the InfoLawGroup has encountered some companies that are taking a pass on cloud computing ("v. 1.0") because of regulatory, privacy and security concerns. Do these compliance concerns threaten the Cloud computing model or potentially reduce the cost benefits it promises?
While there is much debate on the IT side as to whether Cloud computing is revolutionary, evolutionary or "more of the same" with a snazzy marketing label, in the legal context, Cloud computing does have a potential significant impact on legal risk. Part three of our ongoing Cloud legal series explores the relationships in the Cloud, and the potential legal implications and impacts suggested by them.
Last month we posted some basics on cloud computing designed to provide some context and identify the legal issues. What is the cloud? Why is everyone in the tech community talking about it? Why do we as lawyers even care? Dave provided a few things for our readers to think about -- privacy, security, e-discovery. Now let's dig a little deeper. I am going to start with privacy and cross-border data transfers. Is there privacy in the cloud? What are the privacy laws to keep in mind? What are an organization's compliance obligations? As with so many issues in the privacy space, the answer begins with one key principle -- location, location, location.
I had the pleasure of hearing an excellent presentation by Tanya Forsheit on the legal issues arising out of cloud computing during the ABA Information Security Committee's recent meeting (at the end of July) in Chicago. The presentation resulted in a spirited debate between several attorneys in the crowd. The conversation spilled over into happy hour and became even more interesting. The end result: my previous misunderstanding of cloud computing as "just outsourcing" was corrected, and now I have a better appreciation of what "the cloud" is and the legal issues cloud computing raises.