For 15 years European companies have been able to keep customer and employee data on remote systems in the US, under ‘safe harbour’ rules.
But last week the European Court of Justice ruled that firms need to carry out their own audits on how such data is kept secure. Meeting the new rules will require firms to find out where their cloud provider stores data.
The growth in cloud computing has seen many firms store data on remote servers, many of which are in the US
If it is held in the US they will have to ensure that its storage meets EU security standards or bring it back to the UK, both of which will cost time and money.
The growth in cloud computing has seen many small firms store data on remote servers, many of which are in the US. Elaine Fletcher, a director at City law firm DWF, said: ‘This creates a great deal of uncertainty for almost any business that transfers data, especially where this is cloud-based.’