For many businesses, cloud computing has become an essential tool to minimise ongoing computing costs. It also provides companies with a facility to access information remotely and globally.
Notwithstanding the benefits of cloud computing, companies should be aware of their legal responsibilities whilst storing personal information onto cloud servers. For example, pursuant to the National Privacy Principles set out in the Privacy Act 1988 (Cth), a company which stores personal information must:
- only collect and store information if it is necessary to deliver a function or activity of the business;
- inform the individual why their personal information is being collected;
- take reasonable steps to ensure that the collected information does not unreasonably intrude upon an individual’s personal affairs;
- ensure the personal information is protected by reasonable security safeguards against loss, unauthorised access, use, modification, disclosure or misuse;
- take reasonable steps to enable the individual to access their personal information;
- ensure the personal information is correct, up to date, complete and not misleading; and
- not disclose the personal information unless the individual is aware of the said disclosure.
In light of the National Privacy Principles, a company which enters into a cloud computing service agreement must ensure that the service agreement appropriately addresses the National Privacy Principles. Please note that there are also special disclosures and provisions which need to be carried out if the cloud computing service is hosted outside Australia as other jurisdictions may not have equivalent privacy protections. Breaches of the National Privacy Principles may result in fines which are proposed to increase to up to $1.1 million.
Tips
- If you are entering into a cloud computing service agreement, ensure there are adequate confidentiality and privacy clauses contained in same.
- If you are offering cloud computing services, ensure you have reasonable security safeguards to protect personal information from loss, unauthorised access, use, modification, disclosure or misuse.
Mr Murdock of our office holds a Juris Doctor in International Trade Law and a Masters of Laws in International Business Transactions from The Netherlands. If you are looking for an international lawyer to represent you in drafting international contracts or representation in arbitrations, feel free to contact us for a free consultation on (02) 9262 5495 or (03) 8899 7870; visit our Website; Like our Facebook Page; or join our Employment Law Mailing List.
This article is not legal advice and should not be relied upon as legal advice. All articles found on this website are intended to provide informative information, nevertheless, in many instances legislation and case law has been simplified and/or paraphrased. If you would like personal legal advice based on your current circumstances, you should contact MurdockCheng Legal Practice for a free consultation.