Wednesday, July 6, 2011

Poisoning the cloud

A lot of Europeans seem to have got their knickers in a twist over Microsoft's plain speaking on data protection. Stripped to its essentials, the CEO of Microsoft UK said that Microsoft doesn't do data protection as required by EU law, because US law explicitly forbids it.

I can see why this causes some consternation, but legally it seems quite straightforward to me. Microsoft, by its own account, can't provide a "safe harbor" for personal data on European citizens. Therefore, any European company that tries to store such data in a Microsoft-provided "cloud" service is opening itself to legal action from its European customers (and/or European governments, prosecutors or regulators, depending on the individual country's law). Those companies, in turn, might sue Microsoft for misrepresenting its service (before last week, at least), and they and Microsoft might sue the aforementioned governments and regulators for losses arising from negligence in applying their laws.

All of which could get messy, sure, but it's hardly the gutters-running-red-with-the-blood-of-the-aristocracy.

The interesting question is, why has Microsoft gone out of its way to declare itself incompetent to serve European data storage?

Simple answer: it doesn't want the business. Much better for Microsoft if people don't store data in clouds, but instead spend tens of thousands of dollars on licenses for SQL Server, and training on how to administer it. That's where the profit is.

Of course, in poisoning its own cloud, MS has also poisoned Google's - and every other US company, for that matter, but Google is the one it cares about. And to Google, the cloud isn't a low-margin fringe activity - it's a whole business model.

So what does Google have to say on this story? Not a word, as far as I can tell. Google is just waiting for the whole thing to blow over.

I wonder if a European, at this point, can take out an injunction to prevent companies she does business with from storing their data outside European jurisdiction? Seems to me that the prospect of a jail term for contempt of court would give CEOs more pause than the distant threat of a corporate fine.

Just something for you Europeans to mull over.

No comments: