News
Cloud computing creates a new legal ballgame: But who will solve the legal issues on this important new technology?
February 2010 by Marc Jacob
Although there are a number of benefits that cloud computing brings to the better business table - including reduced servicing costs and increased flexibility on IT services - there are still a number of legal issues that need to be addressed, say the organisers of 360°IT - The IT Infrastructure Event.
According to Natalie Booth, the show’s event director, Microsoft is quietly lobbying for new legislation in a number of key countries, with the software giant’s general counsel reportedly visiting several countries to lobby for the changes.
"Microsoft’s corporate counsel Brad Smith has been globe-trotting in connection with this for some time, as was confirmed by his presentation at the Brookings Institution last month," she said.
"Brad Smith referred in his Brookings speech about Facebook’s founder Mark Zuckerman’s comments that `privacy is no longer a social norm,’ and questioned this statement, calling on the US Congress to modernise the law, and filling in the gaps that cloud computing clearly creates," she said.
"Smith also noted that it is often difficult to place a specific monetary value on the theft of content, reasoning that it makes more sense to impose statutory penalties on a per-victim basis," she added.
The problem facing regulators in most countries, Booth says, is that the penalties for hacking into an individual computer are the same as for a cloud-based IT system, even though the potential financial losses are clearly a lot higher.
According to the 360 IT Event show director, Smith’s observations that legislation as it relates to cloud computing - with the courts in Belgium, Brazil and Italy seeking to impose penalties on US cloud entities in recent cases - is complex, is a very valid one, but the big question is who will administer this legislation.
It’s interesting to note, she says, that Kroll Ontrack’s major survey into data risk breaches - the third annual ESI trends study - the results of which were released last November, noted that firms may also face legal consequences following a breach due to the rising level of breaches in the news.
And, she explained, as firms place more and more of their data and IT assets in the cloud, the legal risks arising from cloud computing will rise, especially now that Gartner is predicting that, by 2014, around 20 per cent of businesses will have most, if not all, of their IT assets in the cloud.
"What we are seeing is a seachange in the way companies access and storage their data. The cloud is clearly the option of choice for a growing number of businesses, but the legal challenges this creates are a potential minefield," she said.
