Questions on data ownership - just what the cloud providers need

I am not a lawyer, and if I'm missing something here, please enlighten me.

Steven Edward Streight (who, incidentally, alerted me to the iFone story that I recently wrote about) has posted something on his Facebook account from the Electronic Frontier Foundation (EFF). This concerns its client Kyle Goodwin, who stored some files on the Megaupload service - files that the government has apparently accessed. In EFF's view, the government did not have the authority to access those files.

Here's what the EFF says:

...the government's approach should terrify any user of cloud computer services—not to mention the providers. The government maintains that Mr. Goodwin lost his property rights in his data by storing it on a cloud computing service. Specifically, the government argues that both the contract between Megaupload and Mr. Goodwin (a standard cloud computing contract) and the contract between Megaupload and the server host, Carpathia (also a standard agreement), "likely limit any property interest he may have" in his data. (Page 4).

Later, the EFF goes on to say:

Apparently your property rights "become severely limited" if you allow someone else to host your data under standard cloud computing arrangements. This argument isn't limited in any way to Megaupload -- it would apply if the third party host was Amazon's S3 or Google Apps or or Apple iCloud.

Now this issue is not new. Before people were worried about what Amazon or Apple would do to their data, they were worried about what popular photo sites would do to their data. In fact, as of May 2001, data that you uploaded to Lockerz was not your data. The Next Web reproduced this quote from Lockerz's TOS:

“This Website and the content and all intellectual property rights included in or associated with the Website, including, but not limited to patents, copyrights, trademarks, service marks, logos and Decalz™ (collectively “Content”), are owned or licensed by us, and all right, title and interest in and to the Website and Content remains with us or our licensors, as applicable.”

And, as The Next Web noted, even those sites that didn't claim ownership of your data claimed the right to use your data. See The Next Web for specific details.

So what's the difference between 2011 and 2012? Back in 2011, everyone was worried about what a private company would do with someone's data. Now, everyone is worried about what the government will do with someone's data.

In my view, there's not a big difference between the two. Either way, someone other than you is doing stuff with your data. And, in fact, the Electronic Frontier Foundation has criticized companies for their terms of service.

So how will large companies react? Large companies have lawyers. Now I like lawyers, but you have to realize that the job of a lawyer is to protect the company. And I bet you that a bunch of lawyers are grabbing this EFF bulletin, going to their CEOs, and saying to them, "Hey, we may lose our data if we put it on one of these cloud services."

Just what the cloud services need - fear, uncertainty, and doubt.