The Impact of the GDPR on Cloud Providers

We just published a new white paper on the European Union’s (EU’s) General Data Protection Regulation (GDPR) and will soon be publishing the results of the two surveys we conducted for that white paper.

In the second of the two surveys we conducted, we asked the following question: “Will your organization increase or decrease use of cloud technology as a result of the GDPR?” We found that 50 percent of respondents indicated they would do so, 39 percent said there will be no change, six percent said they didn’t yet know, and only five percent said that use of the cloud will decrease. That tells us a few things:

  • Many decision makers are still unsure about how they’ll deal with the GDPR. A thorough reading of the regulation, as with most government rules, leaves room for interpretation. For example, if data on an EU resident is subject to a litigation hold in the United States and the EU resident exercises his or her right to be forgotten, should the data controller violate its obligations to retain the data or violate the GDPR? That uncertainty will lead many to seek the assistance of third parties, many of which will be cloud providers that have more expertise in dealing with these kinds of issues.
  • Many organizations will pass the buck to their cloud providers. Because many organizations are simply not sure about how to deal with the GDPR, particularly smaller ones that can’t afford a team of GDPR-focused legal and compliance experts, they will rely increasingly on cloud providers who they anticipate/expect/hope will navigate the intracacies of the GDPR on their behalf. We believe that will accelerate the replacement of on-premises solutions with those based in the cloud.
  • Consequently, the choice of cloud providers will become extremely important. Since a cloud provider that inadvertently violates key provisions of the GDPR while working on behalf of their clients will not be a shield from prosecution, GDPR savvy will become a top priority when selecting new, or staying with existing, cloud providers.
  • The new ePrivacy Regulation that will supplement or replace key provisions of the GDPR will impose significant usability restrictions on even simple activities like web surfing. For example, it is very likely that web site visitors will need to grant permission for each and every cookie dropped into their browser when visiting a web site, yet that web site operator will not be able simply to block content for those users who do not grant permission. This will make the choice of a web host extremely important in order to comply with both the GDPR and the ePrivacy Regulation.

In short, while the GDPR increases privacy protections for individual users in the EU, it is increasing the risk for those that wish to provide content to them. Many companies, particularly smaller ones, will seek to mitigate that risk by handing it off to cloud providers.

You can download our newest GDPR white paper here, and get more information on the ePrivacy Regulation here and here.

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