Cloud Data Ownership | How Does It Affect You? | FileCloud

November 28, 2016

The future of the cloud seems bright, Cisco predicts that by 2018, 59% of cloud workloads will be created from Software As A Service (SaaS). While these statistics are optimistic, we cannot ignore a few concerns that stifle cloud adoption efforts, such as data ownership. Most people would be inclined to say that they still […]

The future of the cloud seems bright, Cisco predicts that by 2018, 59% of cloud workloads will be created from Software As A Service (SaaS). While these statistics are optimistic, we cannot ignore a few concerns that stifle cloud adoption efforts, such as data ownership.

Most people would be inclined to say that they still own data in the cloud. While they may be right in some sense, this is not always the case. For instance, let us look at Facebook, which many people use as cloud storage to keep their photos. According to the Facebook end-user-agreement, the company stores data for as long as it is necessary, which might not be as long as users want. This sadly means that users lose data ownership. Worse still, the servers are located in different locations, in and out of the United States, subjecting data to different laws.

According to Dan Gray, as discussed in ‘Data Ownership In The Cloud,’ the actual ownership of data in the cloud may be dependent on the nature of the data owned and where it was created. He states that there is data created by a user before uploading to the cloud, and data created on the cloud platform. He continues to say that data created prior to cloud upload may be subject to copyright laws depending on the provider, while that created on the platform could have complicated ownership.

In addition to cloud provider policies, certain Acts of Congress, although created to enhance data security and still uphold the nation’s security, have shown how data ownership issues affect businesses. Two of these, the Stored Communications Act (SCA) and the Patriot Act show the challenges of cloud data ownership and privacy issues, with regards to government access to information stored in the cloud.

The Stored Communications Act (SCA)

Usually, when data resides in a cloud provider’s infrastructure, user owner rights cannot be guaranteed. And even when users are assured that they own their data, it does not necessarily mean that the information stored there is private. For example, the United States law, through the Stored Communications Act (SCA), gives the government the right to seize data stored by an American company even if it is hosted elsewhere. The interpretation of this saw Microsoft and other technology giants take the government to court, claiming that it was illegal to use the SCA to obtain a search warrant to peruse and seize data stored beyond the territorial boundaries of the United States.

Microsoft suffered a blow when a district court judge in New York ruled that the U.S government search powers extend to data stored in foreign servers. Fortunately, these companies got a reprieve mid-2016, when the Second Circuit ruled that a federal court may not issue a criminal warrant to order a U.S cloud provider to produce data held in servers in Ireland.  It is however, important to note that this ruling only focused on whether Congress intended for the SCA to apply to data held beyond U.S.A territory, and did not touch on issues to deal with Irish data privacy law.

The Patriot Act

The Patriot Act was put into place in 2001 as an effort by George Bush government to fight terrorism. This act allowed the Federal Bureau of Investigation (FBI) to search telephone, e-mail, and financial records without a court order, as well as expanded law enforcement agencies access to business records, among other provisions. Although many provisions of this Act were set to sunset 4 years later, the contrary happened. Fast-tracking to 2011, President Barrack Obama signed a 4-year extension of 3 key provisions in the Act, which expanded the discovery mechanisms law enforcement would use to gain third-party access. This progress brought about international uproar especially from the European Union, causing the Obama administration to hold a press conference to quell these concerns.

The situation was aggravated when a Microsoft UK director admitted that the Patriot Act could access EU based data, further disclosing that no cloud service was safe from the ACT, and the company could be forced to hand over data to the U.S government. While these provisions expired on June 1 2015, due to lack of congressional approval to renew, the government found a way to renew them through the USA freedom Act.

The two Acts show us that data owned in the cloud, especially public cloud, is usually owned by the cloud providers. This is why we are seeing the laws asking cloud providers to provide this information, and not cloud users.

What To Do In Light Of These Regulations

Even if the SCA has been ruled illegal as not to be used to get warrants to retrieve data stored in the cloud, and the USA freedom Act is purported by some parties as a better version of the Patriot Act, we cannot ignore the need for cloud users to find a way to avoid such compulsions.

One idea users could have is escaping the grasp of these laws, which is unfortunately impractical. To completely outrun the government, you would have to make sure that neither you nor the cloud service used has operations in the United States. This is a great disadvantage because most globally competitive cloud providers are within the United States jurisdiction. Even when you are lucky and find a suitable cloud provider, it is may still be subject to a Mutual Legal Assistance Treaty (MLAT) request. Simply, put, there is no easy way out.

Instead, understand the risks and let your clients know. For example, if the Patriot Act extension attempts were successful, financial institutions would be obliged to share information with law enforcement agencies on suspicion of terrorist activities. In such a case, a good financial institution would warn its clients of these risks before hand. Alternatively, you can find a way of storing data in-house, forcing the feds to go through you and not the cloud provider.


Truthfully, data ownership in the cloud is a complicated issue.  Determined by both government and company policies, data ownership in the cloud is not always retained.  Gladly, depending on data policies and how they categorize data in the cloud, a user could be granted full ownership. In the event that this doesn’t happen, prepare for instances of third-party access and infringement of complete privacy, hence rethink your business strategy. In short, as a cloud services client, please pay attention to the contract that you sign with your provider and understand the laws under which the provider operates.

By Team FileCloud