Cloud Service Providers And The Law

Cloud Service Providers And The Law

Cloud Service Providers And The Law

Imagine opting out of the continuous struggle to keep software up to date, and essentially getting rid of overburdened corporate IT departments struggling to keep systems functional. This initial flavor of cloud computing given to the public is increasingly holding true to its promise due to numerous benefits such as flexibility, cost reduction, accessibility, and reliability. Undoubtedly, cloud computing presents a potential paradigm shift for all industries and sectors with many benefits such as flexibility, cost reduction, accessibility, and reliability.

While several technical benefits of cloud computing exist, there are few important considerations for users and corporations. One of the most important is the legal repercussions these new technologies may trigger. With the arrival of any new technology, the applicability of existing laws and the possibility of new laws tailored specifically to the new technology remain unclear until precedents are set. The cloud computing phenomena is global in nature challenging the very touchstone of jurisdictional complexities.

Lawyers-law-firms-cloud-computing

(Infographic Source: Business Of Law Blog)

These legal qualms pose significant risks to cloud service providers and users alike. Service providers constantly battle to strike a balance between reward of investing in better and new technologies; on the other hand, they expose themselves to greater risk of potential lawsuits as well as uncertain future regulations. For small businesses, this issue may even be greater as they lack resources to effectively negotiate contracts with large cloud service providers. On the other hand, large corporations may be easier to draft and negotiate a ‘strong’ contract with service providers.

Broadly speaking, there are six widely applicable regulations relating to cloud computing in the United States.

1. Stored Communications Act (SCA)
2. USA Patriot Act
3. The Health Insurance Portability and Accountability Act (HIPAA)
4. US Export Control Regulations
5. Federal Trade Commission Act
6. Communications Privacy Act of 1986 (ECPA).

While laws extensively cover areas related to security and privacy, loopholes are certain when referring matters relating to cloud computing. For instance, in 2011, a class action complaint was lodged against a cloud storage provider in Wong v. Dropbox, Inc., where, it was alleged that the company violated the California Unfair Competition Law and negligently invaded privacy of individuals. The class action complaint against Dropbox arose out of an update that inadvertently allowed anyone to log into any account using any password within a four hour window.

The risks are geared towards confusion as to applicable laws, the changing regulatory climate, and lack of industry standards. Cloud computing does reflect paradigm shift for both users and corporations, as it allows taking advantage of economies of scale as well as specialization to provide a more efficient and economical solution.

As jurisdiction within the cloud is so unclear, the only option would be to come to a mutual agreement or a compromise between cloud provider and user. Therefore, a harmonious and uniform set of laws governing data privacy and security is required which, in turn, would be beneficial in several respects. For instance, service providers would be able to assess their risks more accurately subsequently decreasing the need for them to push their risk onto users through contracts that force the customer to deal with privacy breaches that may be the fault of the service provider.

By Syed Raza

About Syed Raza

With over 20 years of combined experience in the fields Law, Management, and IT, Syed has impeccable reviewing and strong editing skills with a long track record of writing technical, legal, and management articles that make readers stop and think.. Being a serial entrepreneur and attorney, he provides consultancy and project management in e-Discovery issues in complex civil litigation. As, a trial attorney with significant experience in matters relating to patent infringement, defense and prosecution in the pharmaceutical industry, contracts disputes, real estate, criminal matters, and international human rights law. Syed provides guidance and counsel to attorneys and clients on all aspects of discovery, including information management, data preservation and collection, early case assessment, comprehensive managed review and production. He also holds a PhD (management sciences) and MBA degree as well.

View All Articles

Sorry, comments are closed for this post.

5 Cloud-Based Customer Service Trends

5 Cloud-Based Customer Service Trends

Customer Service Trends Customer service has become the new battleground in today’s marketplace. In fact, 97 percent of customers around the world now say that customer service makes a key difference in whether they decide to go with a brand or not, Microsoft reports. Many of the biggest changes in today’s customer service landscape center…

Conquering Disease with Artificial Intelligence and IBM Watson

Conquering Disease with Artificial Intelligence and IBM Watson

Artificial Intelligence and IBM Watson Artificial Intelligence, or AI, is growing increasingly pervasive in today’s modern world. Perhaps the most publicized and recognizable application of AI to date, IBM’s Jeopardy-winning computer, Watson, is now being used to help cure cancer. IBM announced the development of Watson for Genomics on Wednesday at the National Cancer Moonshot…

The Fundamentals of Predictive Analysis

The Fundamentals of Predictive Analysis

Predictive Analysis  Article sponsored by SAS Software and Big Data Forum Analytics is playing an increasingly important role in our lives thanks in large part to internet of things (IoT) developments and a greater appreciation of Big Data. With solutions that range across business productivity, health care, individual and national security, new insights are regularly…

Clouding Around With The Unicorns

Clouding Around With The Unicorns

The Social Unicorn Early investors and technology consumers alike love the poignantly named “Unicorn” companies, or private startups that reach the $1 billion valuation. The most recent unicorn spotting is social media game-changer Snapchat, which was recently valued at $16 billion. According to a recent infographic from Alexa discovered via Adweek, Snapchat also proves to…

Achieving Network Security In The IoT

Achieving Network Security In The IoT

Security In The IoT The network security market is experiencing a pressing and transformative change, especially around access control and orchestration. Although it has been mature for decades, the network security market had to transform rapidly with the advent of the BYOD trend and emergence of the cloud, which swept enterprises a few years ago.…

Cloud Computing – The Game Changer

Cloud Computing – The Game Changer

Global Cloud Index In October, Cisco released its Global Cloud Index (GCI) report for 2014-2019, projecting a near 3-fold growth of global data center traffic, with predictions that this traffic will reach 8.6 zettabytes (cloud data center traffic) and 10.4 zettabytes (total data center traffic) per year in 2019 and 80% of it will come…

New Report Finds 1 Out Of 3 Sites Are Vulnerable To Malware

New Report Finds 1 Out Of 3 Sites Are Vulnerable To Malware

1 Out Of 3 Sites Are Vulnerable To Malware A new report published this morning by Menlo Security has alarmingly suggested that at least a third of the top 1,000,000 websites in the world are at risk of being infected by malware. While it’s worth prefacing the findings with the fact Menlo used Alexa to…

Are Women Discriminated Against In The Tech Sector?

Are Women Discriminated Against In The Tech Sector?

Women Discriminated Against In Tech Sector It is no secret that the tech industry is considered sexist since most women are paid less than men; there are considerably fewer women in tech jobs; and generally men get promoted above women. Yet the irony is twofold. Firstly, there is an enormous demand for employees with skills…

Infographic: The Evolving Internet of Things

Infographic: The Evolving Internet of Things

Evolving Internet of Things  The Internet of Things, or IoT, a term devised in 1999 by British entrepreneur Kevin Ashton, represents the connection of physical devices, systems and services via the internet, and Gartner and Lucas Blake’s new infographic (below) explores the evolution of the IoT industry, investigating its potential impact across just about every…

Cloud Infographic – What Is The Internet of Things?

Cloud Infographic – What Is The Internet of Things?

What Is The Internet of Things? “We’re still in the first minutes of the first day of the Internet revolution.”  – Scott Cook The Internet of Things (IOT) and Smart Systems are based on the notions of Sensors, Connectivity, People and Processes. We are creating a new world to view and measure anything around us through…

Driving Success: 6 Key Metrics For Every Recurring Revenue Business

Driving Success: 6 Key Metrics For Every Recurring Revenue Business

Recurring Revenue Business Metrics Recurring revenue is the secret sauce behind the explosive growth of powerhouses like Netflix and Uber. Unsurprisingly, recurring revenue is also quickly gaining ground in more traditional industries like healthcare and the automotive business. In fact, nearly half of U.S. businesses have adopted or are planning to adopt a recurring revenue model,…

5 Ways The Internet of Things Will Drive Cloud Growth

5 Ways The Internet of Things Will Drive Cloud Growth

5 Ways The Internet of Things Will Drive Cloud Growth The Internet of Things is the latest term to describe the interconnectivity of all our devices and home appliances. The goal of the internet of things is to create universal applications that are connected to all of the lights, TVs, door locks, air conditioning, and…