US Law Makers to Regulate the Cloud?

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Infoworld just published a great piece called Cloud computing may draw government action. The article goes into data privacy concerns with the cloud. They state that Cloud computing will soon become an area of hot debate in Washington, D.C., with policy makers debating issues such as the privacy and security of data in the cloud, a panel of tech experts said Friday. The basis for much of this came from the Pew Internet and American Life survey which outlines consumer perception on the cloud. If you’ve read my blog before, information security is one of my key concerns (Seven Cloud-Computing Security Risks) I have with the cloud.

Mike Nelson asserts, "I do think government has an almost infinite ability to screw up things when they can’t see the future," Nelson said. "We have to have leadership that believes in empowering users and empowering citizens."

I agree with one aspect of this statement which asserts that innovation will be hindered by enforcement of regulations on the cloud. But I think that this is trumped buy the larger concern than just innovation. With so much data going to the cloud there needs to be a greater responsibility imposed on Cloud vendors that endures protects for consumers. People often think that regulation is bad or a necessary evil. I disagree. For the most part it protects us as consumers so we can trust and have a level on insurance with cloud services.

Cloud vendors may have well intentions but they also have a conflict of interest when looking at non-tangible things such as security. Security doesn’t increase the bottom line, it is something that is a bit of an unknown until something catastrophic happens. The conflict of interest solely lies in financial results in features that directly correlate vs. planning for the unforeseen. I would of thought with all the financial market issues with data breach-apolosa over the past five years that this would wake the industry up a bit.

Infoworld points out some major policy issues that still need to be worked out:

  1. Who owns the data that consumers store on the network?
  2. Should law enforcement agencies have easier access to personal information in the cloud than data on a personal computer?
  3. Do government procurement regulations need to change to allow agencies to embrace cloud computing?

Interesting enough 49% percent of U.S. residents said they would be very concerned if law enforcement agencies has access to their cloud data. Pew Internet and American Life Project conducted a survey released Friday that goes through these details. But this is only one of the potential issues with the cloud, for example 1/5 companies use social networking sites such as myspace.com to screen for employment. It’s not a stretch to image a slew of different scenarios that are less than favorable for the consumer.

The good news is that we have seen cloud vendors address privacy concerns over the past few months proactively. Google recently did and according to reports, one of the main objectives of the "new Facebook" was to improve users’ privacy and security settings. Because the social network did this very well, people will remain loyal to the service over time. C.G. Lynch wrote an great post called In Facebook, Privacy is King. Check it out it is worth a read.

For me the bottom line here is that cloud vendors have the opportunity to get in front of this issue before stringent regulation occurs. This may lower the level of scrutiny that law makers impose, but the ball is in their court. I think the big cloud vendors such as Microsoft, Amazon, Google and Facebook will be the leaders in this space, hopefully this trickles down.

Check out the Infoworld article for more excerpts from the survey:

http://www.infoworld.com/article/08/09/12/Cloud_computing_may_draw_government_action_1.html

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