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    05/03/2013 - "Is the cloud cloudy ?" by Richard Milchior

    For the last two years, Cloud computing has had an incredible growth. The re- cent forecasts are mentioning a turnover which should be around €29 billion in- cluding 1.7 billion in France at present, and expecting to rise to 5 billion by 2015. Every- body wants to be a part of a growing market where the future is.

    Hundreds of articles have now been written worldwide to explain how beautiful the Cloud is (mainly by software companies and management or consulting people). Hundreds more written by lawyers explaining how dangerous it could be.

    In addition entities such as the European Commis- sion, the various data privacy authorities national as well as the G29 which groups all the European Data protection authorities have commissioned studies, prepared reports and established or pro- posed some charter or guide lines concerning the use of Cloud Computing.

    In parallel, a new trend : the creation of national cloud is being organised in several countries with the dual objective of competing with the US giants and of protecting the national sovereignty. This article summarise the arguments most often used by those in favour of the Cloud and those afraid of it and offers the answers proposed to find out about their relevance and try to propose a new solution.

    The companies offering a Cloud service explain :

    • That Cloud services are a source of savings since for instance you have a storage area which is flex- ible according to your need and you pay according to your use.

    • You do not have to pay the licence and install the software that you need since you will pay accord- ing to the use and they will be available remotely

    • A level of reliability which is usually between 99 and 100% is mentioned and sometimes guaran- teed.

    • The technological knowledge of the provider is also mentioned and it is true to the biggest pro- vider of cloud services are companies which have been active on the computer field (hardware and software) or in the internet or e-commerce world for several years and sometimes more.

    •The newer companies will on the contrary ex- plain that they are more agile and have been cre- ated specifically to provide this kind of services and are therefore better prepared and equipped to provide them. The lawyer and the authorities have a different view.

    • They explain that from a technical point of view, you may have data protection issue especially in the data are transferred to another country.

    • They mention that using the services of an US company which will host the data in the US cre- ates the possibility to see those data being exam- ined or transferred to the Homeland Security on the basis of the Patriot act.

    • They recall that some big providers have suffered some stoppage during several hours and that the clients were not able to work during those “long period” of time.

    • They mention that the client should check if a re- versibility clause exists to be sure to be able to re- cover their information when the agreement ends.

    • They point out that some contracts mention that the service can be interrupted with an 8 hours ad- vance warning or even less. Relief is not really available since you may have to go to a remote (remote for European and even American) state court located for instance in San Antonio ,TX or in an exotic location where you may then have to bear the cost of an US litigation. How will you deal with this when your service can be cut in the next hours ?

    The provider of national clouds states that their data remain located inside their national territory which minimise the risk of loss or theft of data in other countries and can also minimise some costs since the information travel less. The major ad- vantage advanced being nevertheless the protec- tion against economic intelligence (in other words economic spy) being known that some states have been known as spying companies of foreign coun- tries to help their own companies.

    If national clouds are being promoted, we are nev- ertheless far away from a European Union Cloud which could be promoted with the assistance and under the Umbrella of the European Commission. A European cloud is as relevant as the launch of the Galileo satellite to maintain the European in- dependence in space.

    The solution offered by the creation of charter or guide line.

    The solution offered seems to have been prepared by people leaving outside of the real world. It is advised for instance to request to know where the servers are located or to obtain a right of audit. Those are for instance two solutions mentioned by the ICO (the UK authority for data privacy). People are also advised to request a reversibility clause to be able to recover their data. This type of advice is given to everybody.

    These simply forget that a single person or a SME will not deal with a real person but will be offered the possibility to click on a contract without any possible discussion.

    Very often no address or phone number is avail- able. It is obvious that the big provider do not want to discuss those contracts with everybody but ask you to sign (in fact to click accept) for a template agreement.

    The situation may be different for big companies which may have a bargaining power. However even for them, one can wonder how many of them did ever try to find out if the reversibility men- tioned in the agreement works for real and if one is able to reuse the “reversed “data. Those who have tried to recover safeguarded data or have lived the migration from one software when everybody tries to make things work, understand the problem one may face when the other party is not cooperative as this may happen with some provider that you are leaving.

    A very fragile way protecting the interest of all par- ties has been opened by the agreement between IBM and a data protection authority allowing a right to audit to the clients.

    If the single client (small or even big) do not have the bargaining power, the intervention of the Data privacy authorities or the One of the European commission may either lead to behavioural or con- tractual engagement from the supplier and in last resort a consumer protection regulation protect- ing the clients of the Cloud to ensure safety quality and reliability could or should be envisaged.

    Other improvements have been shown by the fact that Amazon has agreed to position some storage centre in Ireland to guarantee the Brittany region that its data will remain in Europe.

    The future could be to create as it exist in the data protection field some standard contrac- tual clauses whose implementation in the con- tract will be recommended and will be enough to guarantee the customer –at least from a legal point of view. The contract should mention that it applies clauses which supersede any contrary disposition. If this is not enough the creation of a minimum regulation if possible at the EU level should be envisaged but all of this should happen quickly in the next year or two.

    Richard Milchior has been a partner of the firm since 1 April 2005. His fields of work are in- tellectual property, EC law, domestic competi- tion law and pharmacy law.

    He began his career in 1979 with the firm “Lafarge Flécheux Ghestin”, then with the firm “Raoul Castelain” from 1981 to 1982. He was then partner with “Robert Collin & Associés”, from 1983 to 1995. He became of counsel with “Nauta Dutilh” until 1999. In 2000, he was a partner in the firm “Milchior Smilevitch”. He works in French and in English.

    After graduating from the Paris IEP (“Sciences Po”) in 1977, Richard Milchior turned towards law, with an honours degree in Private Law (Par- is X Nanterre) in 1978, which he completed with an honours degree in Economic Science (Paris X Nanterre) in 1979. He was admitted to the bar in 1979, then obtained a postgraduate degree (DEA) in General Private Law (Paris II) and a postgrad- uate degree (DEA) in Criminal Law (Paris II) in 1981. In 1982, he obtained his Ph.D. on “Copy- right and the Common Market”, then, in 1983, he graduated as Master of Comparative Jurispru- dence (New York University). He graduated in mediation in 2008 from the University of South Florida (Tampa).

    Source : Corporate Limewire


Richard Milchior