The European Commission has outlined its aim for the EU to become a "world leading" cloud computing market on matters relating to data protection and security.
However, it said it is opposed to the EU closing its market to cloud providers that are based and store data abroad – despite recent revelations about the accessibility of data held by US technology giants such as Google and Microsoft to US intelligence body the National Security Agency (NSA).
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The Commission said that the leaked details about the NSA's use of "Prism", a computer program used to analyse data and communications stored by some major US-based cloud providers had "aggravated" the existing concerns of organisations within the EU about the "security and confidentiality of information in the cloud".
It said, though, that subsequent calls for there to be a national or regional-only cloud computing framework established were misguided.
"Such fragmentation or segmentation of the cloud computing market along national or regional lines could unfortunately hold back the development of cloud computing in Europe," the Commission said in a memo outlining what precisely it means by "secure cloud computing" in Europe.
"National or regional computer provisioning is the traditional position for most national administrations and there are national rules that prevent some specific kinds of data (in particular public sector data) from being transferred across borders, even inside the EU."
"However, national level initiatives in particular where the software systems are adapted to local circumstances will not achieve a scale of roll out that would unlock the full economic benefits of cloud computing. A larger market will increase competition and value for money, and reduce costs.
"It would also open up new opportunities for European cloud providers, which are at the moment far from being market leaders. A fragmented market for cloud computing will be a set-back for the digital single market, for a connected continent, and for customers and suppliers alike," it added.
However, the Commission said that there was now an opportunity for Europe to establish itself as a trusted leader on data protection and security in the cloud environment.
"Trust can be restored with more transparency and the use of high standards," the Commission said. "A better overview of standards, certification of the use of those standards and safe and fair contract terms for cloud computing are essential."
It added: "Users should be able to see clearly what a service consists of. What does any single cloud supplier promise customers? Do they live up to those promises during the delivery of the service? Service levels, such as the up-time of your service and what happens when it doesn't work, need to be transparent.
"Auditing and reporting on access to data should be accessible to the customer: who looked at my data when and why? And important aspects of cloud services like the interoperability of services, a potential lock-in situation and potential security breaches should be communicated to users," it said.
The Commission added that "more transparency on government access to data, for example, for reasons of law enforcement and national security is needed" in order to restore trust in the EU cloud market. This transparency should include "commitments on what constitutes legitimate government access to data and transparency about what access requests have been made".
It added: "This is not to deny that intelligence and security services have a legitimate need for such access to defend society, it is merely to lay out a governance framework for such access, particularly where it is cross-border."
Last year the European Commission set out a cloud computing strategy in which it outlined plans for the drawing up of standard cloud computing contract terms that businesses could use in their agreements with cloud providers.
As part of the strategy the Commission said that it would also work with cloud providers in a bid to establish a new "code of conduct" that would "support a uniform application of data protection rules". The code could be put before the Article 29 Working Party, a committee of EU privacy watchdogs, for scrutiny, with the Working Party's "endorsement" ensuring "legal certainty and coherence between the code of conduct and EU law," the Commission said.
In addition, the European Telecommunications Standards Institute (ETSI) was also asked to help set out what new standards are required for the way that cloud services work.
Those standards could relate to data security, interoperability and data portability, the Commission said. It said that new "technical specifications in the field of information and communication technologies for the protection of personal information" would have to meet the EU rules on standardisation.
Another initiative that the Commission committed to under the cloud strategy was to seek the development of new "EU-wide voluntary certification schemes in the area of cloud computing", including certification schemes that enable businesses to review cloud providers' data protection compliance. It could publish a list of those schemes "by 2014".
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