US cloud vendors: foreign vendors spreading fear about US privacy laws

A visitor uses his mobile phone in front of a logo for cloud computing software applications at the booth of German company Deutsche Telekom at the CeBit computer fair in Hanover in March. (Fabrizio Bensch/Reuters)

As privacy lawyer David Fraser highlighted in his blog, a US House of Representatives Judiciary Committee hearing recently showed how US cloud computing vendors are concerned that unwarranted fear is being spread by non-US vendors about privacy protections in the US, discouraging the use of American cloud vendors.

CIO (a trade publication for chief information officers) reports that:

Deutsche Telekom and other companies are marketing their cloud products as more private than those from U.S. vendors because of the Patriot Act and other laws, representatives of the Business Software Alliance and Rackspace told a U.S. House of Representatives subcommittee during a hearing Wednesday.

Foreign cloud computing vendors are spreading “fear, uncertainty and doubt” about U.S. privacy standards, Justin Freeman, corporate counsel for Rackspace, told members of the House Judiciary Committee’s Internet subcommittee.

“We commonly see almost absurd positioning of what the Patriot Act permits, to the extent that it allows almost any U.S. government agency to, without notice or warrant, access any private data that’s on a server contained within the United States,” Freeman said.

“That’s totally false,” said Representative Bob Goodlatte, a Virginia Republican.

There is no mention in the CIO.com article about any Canadian vendors cashing in on the perceived risks of having data housed in the US.

The CIO article also has some interesting quotes on “data localization requirements” in other countries:

“Some countries are using unfair policies to intentionally disadvantage foreign competitors and grow their domestic cloud computing industry,” Castro said. “The rise of cloud mercantilism is an emerging threat to global trade and information technology.”

Greece, China, Russia and Venezuela are among the countries that have passed data localization requirements, Castro said. He called on the U.S. government to push against such laws.

Looks like “trade wars” may be entering the cloud.

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