The FTC Takes on the Cloud

The Federal Trade Commission is urging the FCC to take into account the privacy and security concerns it has regarding cloud services when the FCC presents its recommendations for a national broadband policy next month.

The FTC is concerned with who has jurisdiction over data as it loses a geographic base and goes to the cloud; how and when governments and other entities can access and use that information; and whether storing personal information in data centers is backed up with strong authentication procedures, among other things.

“The ability of cloud computing services to collect and centrally store increasing amounts of consumer data, combined with the ease with which such centrally stored data may be shared with others, create a risk that larger amounts of data may be used by entities in ways not originally intended or understood by consumers,” wrote FTC attorney David C. Vladeck in a letter to the FCC.

He also urged the FCC, when it crafts the plan, to take heed of the FTC’s “law enforcement, consumer education, and ongoing policy development efforts in light of its years of experience in online, and offline, consumer protection.” The FCC is scheduled to deliver its broadband plan recommendations Feb. 17.

The issues are apropos considering several high-profile cloud outages, such as Microsoft Corp.’s recent loss (and eventual recovery) of thousands of T-Mobile USA’s customers’ Sidekick data.

The FTC began expressing its cloud-related concerns last March, and has been holding meetings to tackle the issues. Last month it hosted a roundtable on targeted advertising, and it will tackle other issues in two more upcoming events in January and March.

“We need to be smarter about dealing with technology, and cloud computing is posing (a) risk for us,” said Hugh Stephenson, deputy director for international consumer protection at the FTC’s Office of International Affairs, back in the spring.