Jurisdiction matters further

I wrote here about how legal jurisdiction affects privacy. Tim Cole writes here about how the EU Data Protection Directive affects cloud services:

Recently, at a press briefing by German IBM boss Stefan Jetter who waxed enthusiastic about Cloud Computing, an elderly journalist rose and asked him a show-stopper: “Where are my data when they’re out there in the Cloud?” Jetter did a double take, but my colleague pressed on: “I mean, physically, where are they?”

Of course, the answer is: On some nameless server somewhere, anywhere in a grid farm in Ohio or Dublin or… In fact, the usual answer is : Who cares?

Well, for one the German privacy protection agencies. Passing data across national boundaries can be a federal offense not only here. The EU Data Protection Directive (officially Directive 95/46/EC on the protection of individuals with regard to the processing of personal data and on the free movement of such data) mandates that personal data may only be transferred to third countries if that country provides an adequate level of protection – something the U.S., just to name one, does not, at least not according to European standards, especially since foreigners do not benefit from the US Privacy Act of 1974.

This could well be problem for smaller cloud businesses that don’t have an EU hosting center. That means that they not only couldn’t serve EU based customers if their service included personal data, they also couldn’t serve multinational companies that had employees in the EU.

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