Cloud Computing Focus Of FTC Probe

According to the FTC's filings from last month, the federal agency is probing cloud computing and identity management as they relate to the nation's broadband implementation plan with the idea that the new technologies could create security and privacy concerns, especially in relation to how data is stored. The filings call cloud computing an "emerging business model" that requires a closer look.

The FTC shares jurisdiction over broadband Internet access and related content and applications with the FCC.

"The FTC staff presently is examining 'cloud computing' and its privacy and data security implications for consumers," David C. Vladeck, head of the FTC's consumer protection Bureau, wrote in the filing to the FCC.

Vladeck wrote that the FTC defines cloud computing as the provision of Internet-based computer services that allows businesses and consumers to use software and hardware located on remote computer networks operated by third parties.

"Because cloud computing has the potential to reduce the need for businesses and consumers to purchase, operate and maintain software and hardware themselves, it may be a less costly way for them to manage, store and use data," Vladeck wrote. "However, the storage of data on remote computers may also raise privacy and security concerns for consumers. For example, the ability of cloud computing services to collect and centrally store increasing amounts of consumer data, combined with the ease with which such centrally stored data may be shared with others, create a risk that larger amounts of data may be used by entities in ways not originally intended or understood by consumers."

The FTC already held one roundtable discussion late last year exploring the privacy challenges posed by recent technological advances, including cloud computing. Additional day-long roundtables are planned for Jan. 28 and March 17.

The FTC wrote that cloud computing and identity management -- including authentication and credentialing issues -- are key components of its privacy and data security program.

"Currently, the FTC is considering cloud computing and identity management as part of a broader initiative to re-examine various models to promote consumer privacy," Vladeck wrote.