Five legal concerns about putting your data in the cloud

As a lawyer, the thing that concerns me about the use of cloud-based computing services is that it often involves the transfer of electronic data from internal IT infrastructure to systems managed by third-party vendors.

This change in custody, and potentially control, can create compliance issues. While not intended to be exhaustive, the following five questions are a good start to the analysis, from a legal perspective, that should occur during the planning of a cloud-based project.

1. How do cloud services affect e-discovery obligations?

Litigation discovery obligations extend to documents in a litigant's custody or control. Accordingly, a consumer of cloud computing services may need to preserve, search and collect data placed onto the cloud if that data remains under the consumer's control.

But how do you know whether such data remains under the consumer's control? Courts have noted in similar situations that the service agreement is the starting point for determining whether data in the custody of a third party is under the control of its originator. For that reason, the service agreement is of singular importance when determining the suitability of a given cloud service.

In the most common uses of cloud services, the consumer retains control over its data, and therefore the scope of electronic discovery obligations is unaffected. Nonetheless, the use of cloud-based services can affect the consumer's ability to meet its discovery obligations in a cost-effective and accurate manner.

For example, the consumer will not have the same knowledge of the workings of the cloud service as it would typically have of its own networks, potentially resulting in slower and more costly discovery, with a higher risk of errors. As another example, a lack of direct access to the cloud hardware coupled with the transitory nature of most cloud services may make preserving and collecting forensic information challenging.

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Source: itbusiness.ca
By: Nolan Goldberg