Cloud Computing Legal Risks In India

Close up of wooden gavel at the computer keyboardCloud computing is an efficient mechanism to get high end technology support without investing in the costly hardware and software. This ease and reduced costs burden also brings its own set of problems. These problems and challenges include both technological and legal issues.

On the technology side, cloud computing entrepreneurs must maintain continuity of services and sufficient cyber security of the data and information residing on their cloud infrastructure. With growing cyber attacks targeting sensitive personal and corporate information this has become a daunting task.

Regarding the legal and regulatory compliance aspects of cloud computing companies must adhere to local laws of many jurisdictions. These include laws pertaining to privacy, data protection (PDF), taxation, data security, etc. The conflict of laws in cyberspace makes them liable to various laws of different jurisdictions at the same time. For instance, Google is currently facing an online defamation case in India for objectionable contents posted on its blogging platform. Similar, situation would arise for both domestic and international cloud computing companies having business operations in India.

It is clear that before launching a cloud computing business in India, the cloud computing legal and regulatory requirements in India must be complied with by the businesses and entrepreneurs dealing in the same. Cloud computing businesses and entrepreneurs must also comply with legal requirements of e-commerce in India. Cloud computing service providers in India are Internet intermediary within the meaning of IT Act, 2000 and they are also required to comply with cyber law due diligence requirements (PDF).

The legal risks of cloud computing may outweigh its benefits for an entrepreneur of he is booked for a legal violation. The cloud computing legal environment in India is still maturing and most of the cloud computing companies in India are not aware of the legal compliances in this regard. Besides the cyber law due diligence, cloud computing due diligence in India must also be complied with by the entrepreneurs.

If the cloud computing businesses in India are also using websites and cloud infrastructure to market their products and deliver their services, the legal issues of e-commerce in India must also be kept in mind. The recent rise and fall of Bitcoins exchanges in India is an example how lack of regulatory compliances can e fatal to a business in India or any other jurisdiction.

It is beyond the scope of this article to cover all cloud computing related technical and legal issues but sufficient is to say that cloud computing businesses in India must comply with techno legal requirements that may involve more than one country.

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