Litigation, Privacy and other Legal Issues in Cloud Computing

by Fred Abramson on October 21, 2009 · 4 comments

There is a growing trend for companies to store information at a remote location, or a “cloud.” Whether you are using Google Docs or have remote servers physically located elsewhere, if you are collaborating with other people and information is not stored on your hard drive, you are probably “cloud computing.”

So who is effected by the move to Cloud Computing?  The move could impact companies such as software companies, internet service providers and hardware manufacturers. Companies in each of these industries will face a big change if more people turn to cloud computing to store their data.

Cloud computing is a terrific alternative for companies who have people working together on a project at different locations.  Because the costs are relatively low, cloud computing makes it easier to conduct business.  However if your business is engaged in posting user information online, you should be mindful of privacy and litigation issues.

Be aware of the types of documents that you post in the cloud and how it can be used by others. Businesses should be especially concerned about posting:

  • Business presentations
  • Employee work and health information
  • Tax and accounting records
  • Schedules and Calendars
  • Contracts
  • Trade Secrets
  • Confidential Consumer Information

If your company becomes involved in a litigation, your opposing counsel may ask your cloud hosting provider for access to company records. A business engaged in cloud computing must know that privacy laws vary depending on the physical location of your provider.

The liability and responsibility for any breach of privacy claims is something that a business needs to protect itself against. Companies can limit liability by having a properly drafted document retention policy.

For more reading about legal issues in cloud computing for lawyers, read Niki Black’s article in the Lawyerist.

If you have any questions regarding cloud computing, litigation and privacy law, contact me at the Law Office of Frederic R. Abramson at 212-233-0666.

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