Laws and Regulations Governing the Cloud Computing Environment

Cloud computing technologies developed around them a complex legal and regulatory environment.  There are federal, international and even state laws that impose responsibilities to both cloud computing tenants and providers. Regardless of which side your business is on, you have to consider the legal issues, especially those related to the data you collect, store and process.

Different sector specific laws for cloud computing tenants and providers

To ensure you are in legal compliance, you may want to know more about American laws. In the United States, privacy and security are spread over different industry specific laws and regulations:

Health Insurance Portability and Accountability Act (HIPAA)

Under HIPAA’s Privacy Rule, an entity may not use or disclose protected health information unless as permitted or required by the Rule, or as authorized in writing by the individual affected. HIPAA’s Security Rule complements the Privacy Rule and deals specifically with Electronic Protected Health Information (EPHI). It lays out three types of security safeguards required for compliance: administrative, physical, and technical. The Rule identifies various security standards for each of these types. Required specifications must be adopted and administered as dictated by the Rule.

The Gramm-Leach-Bliley Act (GLBA)

It has 2 key rules for “financial institutions” storing data in the cloud: the Financial Privacy Rule and the Safeguards Rule. The Financial Privacy Rule requires institutions to notify each customer at the time the relationship is established and annually thereafter about the personal information about them collected, where that information is kept, with whom is shared, how is used, and how it is protected. The Safeguards Rule requires financial institutions to develop a written information security plan that describes how the company plans to protect clients’ nonpublic personal information.

Payment Card Industry Data Security Standard

The Payment Card Industry Data Security Standard (PCI DSS) was jointly developed by Visa and MasterCard to simplify compliance for merchants and payment processors. It has 6 core areas and 12 requirements that cover best practices for perimeter security, data privacy, and layered security.

 Family Educational Rights and Privacy Act (FERPA)

FERPA is a federal law that protects student information collected by educational institutions and associated vendors. These institutions must have the student’s consent prior to disclosure of personal data including grades, enrollment status, or billing information. Protection of student information according to FERPA regulations is a key consideration in using cloud-based applications that handle student records. IT administrators must be aware of the information that is passed to a cloud network or application.

US-based cloud tenants and providers must consult a plethora of industry-specific laws to determine their legal risks and obligations. But if you don’t adequately protect the information you store, there are some important consequences you should assume, like fines or lawsuits. Remember that fines and lawsuits can have devastating consequences for small or midsize businesses.

So, do you know what laws should govern your cloud computing technologies?

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