Last week the European Court of Justice ruled that the fifteen-year-old Safe Harbor pact is now invalid, citing that it violates the privacy rights of its citizens.

American companies like Facebook, Google and Twitter will be facing some scrutiny - as if they aren’t already, let’s be honest - from individual European countries and could be forced to host European data in Europe, of all places.

Cloud computing startup Box have already announced that they would be opening data centres in Europe by partnering with IBM, who have around 46 data centres around the world. A rather costly fix, but they are valued at around a billion dollars, so perhaps they can afford it.

It’s a Hard-Knock Life

In all honesty, having to follow the individual regulations of each European country in the EU is going to be a bureaucratic nightmare. Up to 4,500 American companies - not just tech - were relying on the Safe Harbor agreement. The larger ones can easily deal with the fallout, but those smaller companies and startups are probably going to lose out if they were planning on using something like Amazon Web Services.

The problem with the pact in the first place is that the US government now treats any data on computers of US-owned companies anywhere in the world as fair game. Microsoft, for example, is contesting a court case won (in the US) by the US government, which asserts that it has the right to access data held in one of the company’s Irish data centres.

US vs the World

To protect data relating to their citizens and firms form American snooping, some countries are now requesting that the data is stored locally, making censorship (and snooping from their own government!) that much easier to carry out. It also means a more costly local cloud service for the consumer.

Options are a little limited at the moment but as companies push for cloud adoption, it’s important for us to get it right. Cloud brokerage is perhaps a good route to go down - giving the control of the data to a local legal entity.

What really strikes me as alarming is if the US and the UK can’t agree on privacy, how can the rest of the world? The Internet is built on the basis of global communications, after all.

Photo courtesy of adweek.com.