EC asks for clear legality in cloud contracts

July 25, 2012

Europe has lagged behind many other regions in the world in terms of cloud computing adoption and the European Commission (EC) believes it may have put its finger on why. The continent's executive body wrote in a paper due out later in the year, but obtained by Reuters, the contracts put in place often unfairly favor providers.

In the writing of such contracts, the EC found that firms offering cloud services tend to lead their customers through a labyrinth of legalese, emerging on the other side with agreements and disclaimers that have them assuming minimal, if any, liability for the confidentiality, integrity and data security in cloud computing.

For cash-strapped organizations looking to reap the benefits of cost efficiency and scalability that the cloud provides, there is little choice.

"They have an attitude of take it, or leave it," European Data Protection Supervisor Peter Hustinx told Reuters. "You want it cheap then do it large-scale and we cannot tell you where the data goes."

Protection limitations
Cloud computing data security and the subsequent liabilities have been a constantly-arising issue in Europe during the past few months. Directives on data protection in the European Union (EU) have also focused heavily on the location of data within the cloud environment, leading to the EC to seek ways to reduce concerns about privacy that have slowed adoption of the technology across much of Europe.

Complex contracts that see providers passing off the responsibility to comply with EU law are part of the reason behind this hesitance. If a company is worried that the provider may cost more in fines and loss of reputation than it gives back, why would it adopt that providers service? By continuing to rely on these contracts, providers are sheltering the climate of distrust that, according to Reuters, is a major reason companies refuse to migrate into the cloud.

Internal cloud services
One reason that may play some part in the complex nature of these contracts, aside from the fluid and international nature of cloud computing itself, is that many of the providers are not from European countries. Most come from the United States, with multiple Asian countries holding down the next few spots, according to Finfacts.

However, countries like Ireland are making significant strides in technological fields, but are still struggling in terms of coming up with homegrown cloud services. According to the Silicon Republic, a Microsoft data center that will host cloud services for all of Europe, the Middle East and Africa, is one of many endeavors from U.S.-based companies in the Emerald Isle.

-McAfee Cloud Security