GDPR and Cloud Hositng Considerations

The Curious Codex

          43 Votes   Published 2024-05-29, Updated 2024-06-16



GDPR and Cloud Hositng Considerations

The Author
GEN UK Blog

By Richard (Senior Partner)

Richard has been with the firm since 1992 and was one of the founding partners

Introduction

The adoption of Cloud computing has revolutionised the way businesses in the United Kingdom (UK) store and manage their data. However, this shift towards cloud-based solutions has raised concerns about data protection and compliance, particularly with the implementation of the General Data Protection Regulation (GDPR) in the UK and Europe. GDPR is a comprehensive data protection law that requires organisations to implement robust measures to safeguard the personal data of individuals. UK businesses that utilise cloud services must ensure that their cloud hosting arrangements adhere to GDPR requirements to avoid potential fines and reputational damage.

This article explores the key considerations for UK businesses when hosting data in the cloud while ensuring compliance with the GDPR. It covers various aspects of GDPR compliance, such as data protection principles, data subject rights, and lawful basis for processing, as well as the assessment of cloud service providers, data localisation, encryption, access control, backup, and disaster recovery. The article also discusses cloud service level agreements, shared responsibility models, risk assessments, incident response, and compliance monitoring. By addressing these critical GDPR and cloud hosting considerations, UK businesses can make informed decisions to securely leverage cloud services while maintaining regulatory compliance.

Key Takeaways

  • The GDPR has introduced new legal requirements for businesses operating in the UK and Europe.
  • UK businesses must carefully evaluate cloud service providers to ensure they meet GDPR compliance standards, including data processing agreements and security measures.
  • Compliance with GDPR in the cloud requires considerations around data localisation, encryption, access control, backup, and disaster recovery.
  • Businesses must establish a comprehensive governance framework and implement continuous monitoring to maintain GDPR compliance in their cloud environment.
  • Effective incident response and breach notification procedures are crucial in the eventof a data breach or security incident within the cloud.

Introduction to GDPR and Cloud Hosting

The adoption of cloud computing has transformed the way UK businesses store and manage their data. However, this shift towards 'cloud' has raised concerns about data protection and compliance, especially in the context of GDPR in the UK. GDPR is comprehensive data protection legislation that expands on the Data Protection Act to requires organisations to safeguard the personal data of individuals, and to be transparent about how they process and manage this data.

What is in scope for GDPR

Email

Email for one is a commonly cloud-hosted service and this is indeed in scope for GDPR compliance. Microsoft & Google themselves do not have to comply with GDPR, and actually they are exempt from GDPR as they are not based in the EU. However, if you are using their services to host your email, then YOU ARE in scope and must comply with GDPR.

CRM's

If you use an online CRM like SalesForce, then this too is in scope for GDPR, and where the company you use stores the data is key, and that means physically and logically stores the data, and potentially any path that data crosses.

Financial Systems

If you use an online accountancy package to manage your financies, to handle payroll, to calculate bonuses and renumerations, this is also within scope for GDPR compliance, and where this data is stored becomes a concern.

Other Systems

Who handles your email marketing and mailing lists?
Who handles your website analytics?
Who handles your social media?

All of these business functions *may* be in scope for GDPR regulation and compliance, and its YOUR job to ensure that the companies you use to manage these functions are GDPR compliant, and that they are storing your data securely and in compliance with GDPR regulations.

Data Subject Rights

GDPR grants certain rights to data subjects, such as the right to access, rectify, erase, restrict, and port their personal data, as well as the right to object to processing and not be subject to automated decision-making.

Businesses must ensure they address these data subject rights when utilising cloud services to store and process personal information.

Lawful Basis for Processing

Businesses must establish a lawful basis for processing personal data, such as consent, contract, legal obligation, vital interests, public task, or legitimate interests. Implementing the appropriate lawful basis for processing is crucial for maintaining GDPR compliance.

Assessing Cloud Service Providers for GDPR Compliance

When UK businesses select a cloud service provider, it is crucial to assess the provider's compliance with the requirements of the General Data Protection Regulation (GDPR). This comprehensive evaluation includes reviewing the data processing agreement, which outlines the responsibilities and obligations of both the business and the cloud provider in relation to personal data processing. In GDPR, the business (YOU) are responsible at all times for the personal data that you process. Simply claiming that you believed 'Cloud Provider X' was GDPR compliant is not a valid excuse for non-compliance. You must ensure that you have taken all reasonable steps to ensure that the cloud provider is GDPR compliant, and will remain GDPR complaint.

Data Processing Agreements

The data processing agreement should address the subject matter and duration of processing, the nature and purpose of processing, the types of personal data and categories of data subjects, as well as the provider's obligations to assist the business in fulfilling its GDPR responsibilities. This legally binding contract ensures that the cloud service provider adheres to the necessary GDPR principles and grants the business the necessary control and oversight over the processing of its customers' personal data.

Any worthy UK based cloud hosting provider will be more than willing to enter into such a contract. It is important to understand that any business who operates outside of the UK/EU cannot be bound by such an agreement, therefore it is vital that you ensure the provider is UK based before entering into such an agreement.

Security Measures

In addition to the data processing agreement, UK businesses should carefully evaluate the security measures implemented by the cloud service provider. This includes assessing the provider's access controls, encryption protocols, and logging capabilities to ensure the appropriate level of protection for personal data stored and processed within the cloud environment. This is something that all UK cloud providers are familiar with, and should be able to provide you with a comprehensive overview of their security measures, and how they ensure the security of your data. Again, it is crucial to ensure that the provider is UK based, as any provider outside of the UK/EU will not be compliant no matter how good their security is.

Data Localisation Considerations

The General Data Protection Regulation (GDPR) requires UK businesses to carefully consider the location of personal data processing and storage, particularly when utilising cloud services. Ensuring compliance with GDPR's data localisation requirements is crucial for UK organisations handling personal information.

Transfer of Personal Data Outside the UK

Under GDPR, any transfer of personal data outside the UK must comply with specific legal mechanisms to maintain an adequate level of data protection. UK businesses must obtain appropriate legal safeguards before transferring personal data to cloud service providers located in countries outside the UK, and these safeguards are not a simple matter.

You must at all times remember the burden for compliance is on YOU primarily, and then you rely on the third parties you have selected. In any litigation, you will be the target, not the provider, and in any successful litigation, you will then have the option to taking legal action against the provider for any damages incurred. As I think its genereally understood, international litigation is a nightmare and massively expensive, which is why the best possible approach is to keep it in country.

Cloud Encryption and Key Management

Encryption is a critical component of GDPR compliance in cloud hosting. UK businesses must ensure that personal data is encrypted both in transit and at rest to fulfill their obligations. Encryption protects sensitive information from unauthorised access, ensuring the security and integrity of data throughout the cloud ecosystem, but it must be managed and controlled securely.

Encryption in Transit

Encryption in transit safeguards data as it moves between the business and the cloud provider. By implementing robust encryption protocols, such as Transport Layer Security (TLS) or Internet Protocol Security (IPsec), UK organisations can secure the communication channels and prevent eavesdropping or tampering during data transmission.

Encryption at Rest

Equally important is encryption at rest, which protects data stored within the cloud infrastructure. UK businesses should work closely with their cloud providers to ensure that all personal data is encrypted at the storage level, using industry-standard encryption algorithms and key management practices. This helps to prevent unauthorised access to sensitive information in the event of a physical breach, but it offers no protection in a live breach.

Data Encryption

When data is stored in a database, it is common place to have those records encrypted, and this is done at the application level. Some systems that are security orientated already employ such protections, but not all systems do. You must ensure that whatever platform you're using in the cloud employs record level encryption of at the very least the personally identifiable information. Since such encryption is a burden, and adds complexity, service provdiers outside the UK/EU generally don't bother, so it is YOUR responsiblity to ensure this is taking place.

Cloud Access Control and Audit Trails

GDPR requires UK businesses to implement appropriate access controls and maintain audit trails for their cloud-based systems. To ensure compliance, businesses must guarantee that only authorised individuals can access and process the personal data stored in the cloud. This involves implementing robust user authentication methods, role-based access controls, and regularly reviewing and updating access privileges.

In addition to access controls, businesses should also maintain detailed audit trails to monitor and record all activities related to personal data processing within the cloud environment. These audit trails can be crucial for demonstrating GDPR compliance, as well as responding to data subject requests or potential data breaches. By maintaining comprehensive audit trails, businesses can track and document all actions taken on personal data, providing a vital record to support their compliance efforts.

Such audit and activity logging MUST be evaluated and scrutinised on a regular cycle to ensure complaince remains high. When you're placing your trust in a third party, YOU must ensure they are compliant and that they are doing what they say they are doing.

Cloud Backup and Disaster Recovery

Ensuring the availability and recoverability of personal data is a key GDPR requirement for UK businesses utilising cloud services. Businesses must have robust backup and disaster recovery procedures in place to protect against data loss or system failures. That backup, must be taken and protected in a secure manner such that, should it be compromised, no personally identifiable information can be extracted. Backups are so often overlooked especially when cloud providers offer it as a service, and yet the the protection of those backups is just as important, if not more so, when complying with GDPR. I have personnaly witnised a company who's backup fell into the wrong hands, and it was a disaster from which they could not recover.

Data Portability

GDPR also grants data subjects the right to data portability, which requires businesses to provide personal data in a structured, commonly used, and machine-readable format. This allows individuals to easily transfer their data between different companies, further enhancing their control over their personal information.

Business Continuity Planning

Businesses should carefully consider their GDPR obligations in the event of a crisis, because compliance doesn't end at the company's legal entity. Indeed, the Information Commissioners office are empowered to persue company directors personally for non compliance. In the event of a disaster companies must be able to ensure data that is in scope is protected.

Service Level Agreements (SLAs)

When selecting a cloud provider, UK businesses must review the provider's service level agreement (SLA) to ensure that it aligns with GDPR requirements. The SLA should clearly define the service commitments, performance metrics, and responsibilities of both the business and the cloud hosting provider. This includes provisions for data processing, security measures, incident response, and ongoing monitoring and reporting to demonstrate compliance.

Many cloud providers, GEN Included, break this down into three separate agreements:

  • The Service Level Agreement, which details how the provider will respond to the business, in timescales, as well as commitments for service delivery
  • The AUP agreement which defines what can and cannot be done on the service and clearly defines roles and obligations. The AUP is the important document, and this lays out the responsiblities of the service provider and customer (from the service providers point of view) in operating the services. It is important to understand that one of the biggest threats to data security comes from within, and cloud providers can only ensure their compliance, but cannot ensure the compliance of the business.
  • The Data Processing Agreement, which defines the obligations of the business and the provider to ensure regulatory compliance for data processing of personal information. This agreement is not a one-size fits all, and indeed if the business utilised a system with record level encryption using closed keys, then the service provider has no requirement for a data processing agreement as they have no access to it, on the other hand if the system is provided by the service provider, then this document must address all the GDPR requirements for data processing.

Let's look at how the responsiblities are shared between the business and the provider

Cloud Provider Responsibilities

The cloud service provider is responsible for securing the underlying cloud infrastructure, including physical, network, and application-level security. This involves ensuring the availability and resilience of the cloud platform, implementing robust access controls, and maintaining comprehensive audit trails. The provider must also assist the UK business customer in fulfilling their GDPR obligations, such as facilitating data subject requests and reporting data breaches within the specified timeframes.

Customer Responsibilities

The UK business customer, on the other hand, is responsible for securing their own data, applications, and user access within the cloud environment. This includes implementing appropriate access controls, encryption, and backup mechanisms to protect personal data. The customer must also ensure that their cloud usage, including the processing of personal data, aligns with the principles and requirements of the GDPR, such as data minimisation, purpose limitation, and transparency.

Shared Responsibilities

By clearly delineating the responsibilities between the cloud provider and the customer, the shared responsibility model enables UK businesses to leverage the scalability and cost-efficiency of cloud services while maintaining the necessary level of control and oversight to ensure GDPR compliance.

Conducting Cloud Risk Assessments

To effectively manage GDPR compliance in the cloud, UK businesses must conduct regular risk assessment exercises. These assessments should identify and evaluate the potential risks associated with cloud-based data processing, such as unauthorised access, data breaches, system failures, and regulatory violations. The risk assessment process should also include the development of mitigation strategies and the implementation of appropriate controls to address identified risks.

Responding to Incidents

The GDPR incident response process should involve the following key steps:

  • Immediate incident detection and assessment
  • Containment of the incident to prevent further damage
  • Thorough investigation to determine the scope and root cause of the incident
  • Notification to the relevant supervisory authority within 72 hours, as required by GDPR
  • Communication with affected data subjects, providing details of the incident and any remedial actions taken
  • Implementation of corrective measures to address the underlying issues and prevent similar incidents in the future

By having a comprehensive Incident response plan in place, UK businesses can demonstrate their commitment to GDPR compliance and their ability to effectively manage and mitigate the impact of any potential data breaches or security incidents within their cloud hosting gdpr environment.

It is likely, that your cybersecurity Partner will provide most if not all of this as part of the service, but you must ensure that 'soemone' has it covered.

The ICO (Information Commissioners Office)

As part of the UK's GDPR implementation, the ICO is given sweeping powers to enforce the regulation in the country. This includes the power to impose fines of up to £17 million or 4% of a company's global turnover, whichever is greater, for non compliance, and to demand access to pretty much anything that could be considered in scope, including planning, contracts, audits, reviews, and even technical information about how data is handled and processed.

No one wants to be involved in an ICO investigation, and I have persoanlly assistanted several companies with providing evidence to ICO and it is time consuming and costly.

Conclusion

The incorporation of cloud computing by UK businesses presents both opportunities and challenges when it comes to GDPR compliance. By meticulously considering the key GDPR requirements and implementing robust measures to address data protection, access control, encryption, backup, and incident response, businesses can leverage the advantages of cloud services while ensuring their cloud hosting arrangements remain fully compliant with the GDPR. Ongoing governance, risk assessments, and compliance monitoring are essential to maintaining GDPR compliance in the cloud and adapting to the evolving regulatory landscape.

If you select a service provider who is already familiar with GDPR, they will have already implemented the necessary controls and procedures to ensure compliance, and you will be able to leverage their expertise and resources to ensure your own compliance. Alternatively, there are many cloud providers who also provide data protection consultancy (like us) to help walk you through the process.

If there is a key takeaway from this article, is that's the buck stops with you for compliance. ICO won't levy a fine on your service provider, only on you. So make sure you have the processes and contracts in place to product you from any incidents, and to vigerously defend your compliance. Utilise internal resources and outside agencies to audit, and asses these processes and contracts periodically to ensure complaince is maintained and everyone is aware of their responsibilities.


          43 Votes   Published 2024-05-29, Updated 2024-06-16

--- This content is not legal or financial advice & Solely the opinions of the author ---


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