The good folks at Cloudiquity.com pointed me to a couple of Threat Level articles from last week that highlight yet another example of how public policy and the law are often at odds with running a business in the cloud.
The articles report that the FBI raided at least two Texas data centers last week, serving search-and-seizure warrants for computing equipment, including servers, routers and storage. The FBI was seeking equipment that may have been involved in fraudulent business practices by a handful of small VoIP vendors.
The problem is that they didn't just grab the systems belonging to the VoIP vendors, but also hundreds of servers that served a wide variety of businesses, the vast majority of which had never dealt with or even heard of the companies under investigation, according to Threat Level. Companies interviewed complained of losing millions of dollars in lost revenue and equipment with no warning whatsoever.
One company, auto vendor marketing and inventory management vendor Liquid Motors, filed suit in a U.S. district court seeking a restraining order against the FBI that would force the return of the company's servers.
In what has to be one of the most scary verdicts for cloud users everywhere, the district court sided with the FBI and supported its probable-cause argument for holding on to the servers. Although the FBI was kind enough to copy the disk drives for Liquid Motors (on drives Liquid Motors had to provide), the precedent set here sends a shiver down my spine.
The issue, I think, is one of how search and seizure laws are being interpreted for assets hosted in third-party facilities. If the court upholds that servers can be seized despite no direct warrants being served on the owners of those servers (or the owners of the software and data housed on those servers), then imagine what that means for hosting your business in a cloud shared by thousands or millions of other users.
As I noted in a blog post last fall, there are a series of legal issues that really need to be addressed before external cloud services can truly be trusted. Here is what I argue must happen:… Read more