Last week, the White House released its report, Big Data: Seizing Opportunities, Preserving Values. My reaction to it is mixed. The report mentions some concerns about privacy with Big Data and suggests some reforms, but everything is stated so mildly, in a way designed to please everyone. The report is painted in pastels; it finesses the hard issues and leaves specifics for another day. So it is a step forward, which is good, but it is a very small step, like a child on a beach reluctantly dipping a toe into ocean.
Increasingly, companies, hospitals, schools, and other organizations are using cloud service providers (and also other third party data service providers) to store and process the personal data of their customers, patients, clients, and others. When an entity shares people’s personal data with a cloud service provider, this data is protected in large part through a contract between the organization and the cloud service provider.
In many cases, these contracts fail to contain key protections of data. For example, a study conducted by Fordham School of Law’s Center on Law and Information Policy revealed that contracts between K-12 school districts and cloud service providers lacked essential terms for the protection of student data. I blogged about this study previously here.
This post was co-authored by Professor Paul Schwartz, Berkeley Law School.
Education was one of the first areas where privacy was regulated by a federal statute. Passed in the early 1970s, the Family Educational Rights and Privacy Act (FERPA) was on the frontier of federal privacy regulation. But now it is old and ineffective. With the growing public concern about the privacy of student data, states are starting to rev up their engines and become more involved. The result could be game-changing legislation for the multi-billion dollar education technology industry.
In the world of data protection, it’s an old story: Personal data gets shared with a third party data service provider, and then something goes wrong at the provider.
Whose fault is it? The organization that shared the personal data with the vendor certainly has responsibility, as organizations are generally responsible for the actions of their independent contractors. But even though an organization might have to pick up the tab, it can still put all the blame on the vendor.
A recent study by the Ponemon Institute, The Risk of Regulated Data on Mobile Devices and in the Cloud*, reveals a stunning need for improvement on managing the risks of mobile devices and cloud computing services. The survey involved 798 IT and IT security practitioners in a variety of organizations including finance, retail, technology, communications, education, healthcare, and public sector, among others. The results are quite startling.
The study concluded that “the greatest data protection risks to regulated data exist on mobile devices and the cloud.” 69% of respondents listed mobile devices as posing the greatest risk followed by 45% who listed cloud computing.