1. Communications Briefing: Navigating the clouds Sam Parr and Ian Walden Wednesday 21 October 2009, 12.00 – 2.00 pm

2. ©2009 Baker & McKenzie 2 Data security considerations –“In the good old days, the bad guys needed to steal your laptop to get access to your secrets. Now they just need a username and password.” –For users, data security is paramount operationally (eg business requirements, competitive advantage) and legally (eg contractual obligations, regulatory obligations) –Increased impact of supplier failure/insolvency. Users less likely to have back up. –As if to make the point.... 13 October 2009: Sidekick data security failure.

3. ©2009 Baker & McKenzie 3 Data security solutions –No easy answer –Users may wish to consider using encryption technologies? –Who controls the encryption? –Contractual protections –Audit rights –Penetration testing –Key point for users: Think about what you are putting into the cloud. Contractual protections are not a substitute for a proper risk assessment.

4. ©2009 Baker & McKenzie 4 Availability –The cloud suffers outages just like everyone else: –January 2009: Salesforce 1 hour outage – 1m subs affected –5 October 2009: Bitbucket / Amazon Elastic Compute Cloud (EC2) 14 hour outage –Bitbucket/Amazon was a network failure, not a server failure. –Inherent weakness in using internet to deliver services? –Reliability of telco providers v Internet providers

5. ©2009 Baker & McKenzie 5 Availability / Service Levels –Story so far: standard products, standard SLA, low business criticality, little/no negotiation –Not appropriate for business critical services/functions? –The future for the cloud is more critical services, but... –Dangerous to offer meaningful SLA, as do not have end-to-end control –Users will need to be educated –Will “usual” service credits be acceptable to either party?

6. ©2009 Baker & McKenzie 6 –Data Protection Directive (95/46/EC) –Communications Privacy Directive (02/58/EC) –Regulation of Investigatory Powers Act 2000 –Privacy and Electronic Communications Regulations 2003 –Privacy relationships –Confidential information –Controller – processor –Terms & conditions of supply –Swift case –State –i.e. law enforcement requirements Privacy and Data Protection

7. ©2009 Baker & McKenzie 7 Data transfers –Exporting data outside the EEA –i.e. Knowing where(ish) your data is located! –e.g. Amazon Web Services –‘adequate level of protection’ –Art. 25 (compliance) or 26 (derogations) route? –Security measures –e.g. encryption –Sufficient? –Model contracts

8. ©2009 Baker & McKenzie 8 Data retention –Documents (things written) & records (events) –e.g. memos and meta-data –Why retain? –Organisation need & regulatory requirements –Obligations and risks –Revenue, disclosure, data protection & limitation –Public procurement rules & FOIA –Solving the multi-jurisdictional problem –One-size-doesn’t fit!

9. ©2009 Baker & McKenzie 9 Data retention –Communications data –Directive 06/24/EC –From 6-24 months –Home Office notification & negotiated arrangements –Regulated activity? –‘Electronic communications services’ & ‘information society services’ –Distinguishing services –Jurisdictional reach? –e.g. UK: “data are generated or processed in the United Kingdom”

10. ©2009 Baker & McKenzie 10 Law enforcement –Public & private law enforcement –Serving civil & criminal orders –e.g. Twitter –Access –Searching remote data –Council of Europe Cybercrime Convention, art. 32 –“lawful and voluntary consent” –Failure to comply –Specific performance, fines & imprisonment –CSR and publicity concerns

11. Communications Briefing: Navigating the clouds Sam Parr and Ian Walden Baker & McKenzie LLP is a limited liability partnership registered in England and Wales with registered number OC311297. A list of members' names is open to inspection at its registered office and principal place of business, 100 New Bridge Street, London, EC4V 6JA. Baker & McKenzie LLP is a member of Baker & McKenzie International, a Swiss Verein with member law firms around the world. In accordance with the terminology commonly used in professional service organisations, reference to a "partner" means a person who is a member, partner, or equivalent, in such a law firm. Similarly, reference to an "office" means an office of any such law firm. Baker & McKenzie LLP is regulated by the Solicitors Regulation Authority of England and Wales. Further information regarding the regulatory position is available at http://www.bakernet.com/London/Regulation.