Legal Issues Surrounding Cloud Computing

Roshni Khatri

23rd Jul'22

The introduction of contemporary services and technologies has given us luxuries of life that the majority of people could not have even imagined ten years ago. Due to the industry's tremendous rise in technological innovations, legal provisions are currently falling behind and desperately searching for solutions to keep up with the improvements. The term "cloud computing" refers to internet-based computing that enables businesses to use a network or pool of computing resources owned and managed by a third party on a pay-as-you-go basis. With this by following the legal advice for entrepreneurs you can operate secure trade operations.

Besides this cloud computing creates new cloud-based services for generating employment. Well, several legal issues are associated with cloud computing like privacy, data security, contact issues, and the issues related to the location of data. We will discuss the prime legal problems of cloud computing systems, so let's discuss it more briefly!


Cloud Computing


Cloud Computing

Cloud computing is the range of online services that are accessed by us. In short, it facilitates you to use remote servers to store and access data instead of relying on local hard drives and private data centers. Thus cloud computing is the on-demand delivery of IT resources through the internet with the pay-to-use mode. So instead of buying and maintaining computer products and services, you can pay to use cloud computing services. 


Legal Issues Surrounding Cloud Computing

However, there are several advantages of cloud computing, still some legal issues are associated with it. Some of these are described below:

Transfer of Data

Security and privacy of data is one of the most fundamental concerns for organizations, while migrating to cloud computing. The successful transmission and storage of data in cloud services create important questions. It is all because of the global character of cloud architecture, diversity of legal processes, their application, and in certain cases their absence. 

Although some progress has been made in this area with the creation of bilateral and multilateral privacy frameworks, such as the Safe Harbor Framework created by the United States and the European Union, which regulates the exchange of data and its storage by the European Union's 1995 Data Protection Directive on the protection of personal data.

 According to the aforementioned framework, only US businesses that have been granted adequate status by the EU are permitted to transfer user data over international borders. The prime elements related to this process are as under:

  • Notice: the end user's or consumer's knowledge of the collection and usage of their data.

  • Choice: Individuals' right to refuse the collection and transfer of their data to other parties.

  • Safety: safeguards to avoid losing the data that has been acquired.

  • Data reliability and purpose restriction: Data must be trustworthy and pertinent for the reason it was gathered.

  • Access: A person's right to access information that is held on him and to delete the inaccurate information.

  • Enforcement & Liability: Effective ways to enforce these restrictions include liability laws.

Thus, these seven guidelines serve as the foundation for any cross-border data transfer and are thus worth addressing.


Cloud Computing


Contracting Issues

License agreements and service agreements have quite distinct core concepts. Cloud is served by the service agreement rather than licensing agreement. Due to rapid growth of cloud computing the click warp agreement is frequently being employed nowadays. It gives the user or consumer no room for discussion. With the growth of cloud computing, conventional, negotiated cloud contracts will eventually become the norm. Though, on a personal level, this is still a distant goal. In absence of negotiation the legal provisions and clauses about the liability and risk responsibility are added during the construction of the contract.

Jurisdictional Issues

The ability of a court to adjudicate actions carried out inside a specific geographic area is known as “jurisdiction”. Because of cloud features like "Virtualization" and "Multi-tenancy," it is more challenging and important to determine jurisdiction in cases of legal disputes involving cloud services. The technology enables the users to determine what data is stored on machines at any particular time.

Multi-tenancy is the ability of a cloud provider to provide services to many persons or organizations from single shared software. Since the data of different users are only virtually isolated and not physically, there is a risk that the data of one user could be viewed by another user without their permission. Additionally, it makes data backup and restoration challenges too.

The flexibility that the cloud provides for data location guarantees that it is used and accessible with the greatest possible efficiency. But it also raises a host of legal problems. 

Now, there is a chance that if the multiple sites are subject to various jurisdictions and legal systems then there may be contradictory legal provisions governing data in the different locations. So it is a big legal issue that various countries have with different laws governing data privacy and government access.


Cloud Computing


Commercial and Business Considerations

The present and future of cloud computing have also been greatly influenced by other economic and business factors, such as the need to reduce risk, ensure data integrity, make data accessible and available, and adhere to Service Level Agreements. Additionally, it brings about a variety of predictable and unforeseen problems that call for specific legislation to solve them.

Moreover, laws are always formed to provide the legal structure to technological advancements. This helps in reducing the complexity of cloud innovations  and software services like (SaaS), platform as a service (PaaS), and infrastructure as a service (IaaS). So the lawful framework is determined and set to create an effective legal system that offers legal remedies to prevent and rectify the harms that result. Thus it is important to fix tensions between legal and technical as it can enable the business owners to balance the business.



Cloud computing services are beneficial and at the same time, it has some serious legal issues that can spoil the privacy of the users. Thus raising awareness and universal access to information and resource mobilizing are the complementary solutions that will never go wrong to have an effective legal system for cloud computing. 

The government will need to play a crucial role in ensuring that entities can benefit from the cloud revolution for economic growth. Their attempts to establish privacy legislation are currently underway. 

So it is important to be encumbered by the difficulties and dangers associated with the cloud. And this can be done by properly resolving the issues relating to users' rights to their data, security, encryption standards, data controllers' obligations, and appropriate transparency and accountability mechanisms.


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A keen observer, who loves to spend time with nature. A fun loving person, enjoys to explore the new aspects of life. Passionate about reading and learning new things. Roshni is dedicated towards her work and has worked in different professions.


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