Legal issues associated with working in the cloud

Publications >.Working in the cloud - should I be worried legally?

 

Cloud computing

I recently had the opportunity of hearing a presentation about "working in the cloud"- at Barcamp Brisbane in other words using internet websites as applications and not needing to load software such as wordprocessing or spreadsheets onto a computer. According to Wikipedia the term cloud is used as a metaphor for the internet, based on how the internet is shown in computer network diagrams and is an abstraction for the complex infrastructure behind it.

 

The obvious advantages of cloud computing

For a person who is not resident at a desk 12 hours a day, the advantages are obvious. You can log on to the internet, go to the sites contraining the applications that you need and work away. You can also save money by using software as a service in this manner too.

 

There also seems to be less risk of application failure in the case of well used laptops for sales people and the like, as the applications are not stored locally but in distant unknown places.

 

Provided you can remember the passwords that you use and have a good way of remembering all the URL's you visit such as Delicious, then working in the cloud can be very effective.

 

The less obvious risks of working in the cloud

 

Liability for data loss

The first thing that struck me as a Lawyer was that working in the cloud appeared to appeal to two polar extremes of users, individuals and large corporations. Both of these groups mitigate against data loss in the cloud differently. Individuals may not mind if they loose data (or are prepared to rely on someone else's backup procedures) and large corporates working with managed services in the cloud will have backup systems.

 

The risk is that individual users are relying on third parties back-up solutions that may or may not be present. In the event of catastrophic data loss - who's liable? What happens to your data if the service you are using goes into liquidation or merges or is acquired?

 

Identity theft and loss of confidential information

Working in the cloud appears to present greater risks of hacking and loss of confidential information that users should consider before storing confidential and sensitive information in the cloud. An SSL certificate is no guarantee against data loss.

 

Privacy issues

Different jurisdications have different privacy laws, so don't assume that your information will be treated in the same way that Australian organisations are required to treat it. Generally you don't know where the servers are that you are working on and what law applies in the event that you have to litigate because of loss.

 

What are the terms and conditions of use?

For individuals (and corporates) signing up to use online applications, it may pay to check the terms and conditions of the service, and also to print them in the case that you need to refer to them at a later stage.

 

 

 

Malcolm Burrows

Associate

 

"The information contained in this article is general in nature and cannot be regarded as anything more than general comment. Readers of this article should not act on the basis of this comment without consulting one of Rostron Carlyle's legal practitioners who will consider their particular circumstances".

 

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