Cloud Computing 2026

Browne Jacobson (Ireland) is pleased to present the Chambers Cloud Computing Practice Guide. Its team of experienced lawyers has extensive knowledge of the legal issues surrounding cloud computing and has advised numerous clients on these matters. Cloud adoption is no longer a trend on the horizon but instead the operational reality for businesses of all sizes across various sectors. The legal landscape has adapted accordingly, and the focus has shifted from whether to adopt cloud services to how to do so securely, compliantly, and on commercially sound terms.

Cloud computing is now deeply embedded in modern business operations. Businesses now use remote servers instead of the hard drives and local computers of the past. Cloud applications are often referred to as “web services” or “hosted services”, but “cloud services” has become the widely used shorthand and is used throughout this guide.

Cloud services may be hosted by a third party (eg, Microsoft) or by a provider that runs its services on Microsoft or another data centre provider.

Cloud services are an established delivery model for IT services to store data on remote servers owned or controlled by third parties, typically on the internet or via private networks. These remote servers are usually hosted in data centres across the world, providing global distribution of computing power, increased storage capacity, fast delivery and on-demand bandwidth. The cloud model was initially attractive because it enabled companies to meet ever-growing IT needs with lower capital expenditure and less reliance on their IT departments; while this is still true, businesses are now wrestling with increasingly high costs for using cloud services. Cloud computing also presents a range of legal and regulatory issues that businesses must navigate. These challenges include data protection and privacy, intellectual property, and contractual issues.

The contents of this guide aim to provide businesses with a comprehensive understanding of the legal issues surrounding cloud computing in the covered jurisdictions, exploring the key legal considerations that businesses must take into account when using cloud computing services, including compliance with data protection and privacy laws, the protection of intellectual property rights, and the negotiation of effective cloud computing contracts.

This piece can be a valuable resource for businesses looking to use, or already using, cloud computing services. A comprehensive understanding of the legal issues surrounding cloud computing can help businesses make informed decisions about using cloud computing services and manage associated risks effectively.

Further, the guide examines issues in cloud providers’ (including VARs or value-added resellers) contracts with customers to ensure customers are adequately protected from the legal risks inherent in cloud service use. That said, these services offer benefits, including enhanced backup and disaster recovery and increased data-handling capacity, which customers should factor into any legal/risk analysis.

Legal Challenges Posed by Cloud Computing

Data sovereignty

When data is stored on remote servers across different jurisdictions, it can raise concerns about data sovereignty and jurisdictional conflicts. Data sovereignty has grown significantly in prominence over the past year, driven by geopolitical uncertainty. The concept of 'cloud sovereignty' has gained traction, with several EU member states seeking solutions that limit exposure to non-EU legal jurisdiction over their data. Sovereign cloud offerings are increasingly being evaluated in procurement decisions. Businesses seeking cloud services should assess not only where data is physically stored, but also where it can be accessed from, and which legal systems could compel disclosure, as these are distinct questions with distinct legal consequences.

Businesses in regulated sectors should be particularly attuned to data sovereignty, as data sovereignty considerations are increasingly being codified into regulatory obligations, including under DORA and sector-specific guidance from national regulators.

Data protection and privacy

One of the key legal issues surrounding cloud computing is data protection and privacy. Businesses must comply with data protection and privacy laws when using cloud computing services. This includes ensuring that personal data is processed in accordance with the relevant data protection laws.

General Data Protection Regulation and the Data Act

When using cloud services, businesses need to consider the key principles of the GDPR, including:

• data minimisation;
• purpose limitation;
• data accuracy;
• accountability;
• lawfulness, fairness, and transparency;
• storage limitation; and
• integrity and confidentiality.

Businesses must ensure they have appropriate data protection and privacy policies when using cloud computing services. These policies should outline how personal data will be processed, who will access it, and how it will be protected.

Furthermore, businesses need to establish proper contractual agreements with their cloud computing service providers. These contracts must clearly define the service provider’s obligations regarding data protection and privacy, and should incorporate appropriately tailored data protection and privacy clauses to address these responsibilities.

Consideration should be given to whether a DPIA (Data Protection Impact Assessment) for the cloud service needs to be prepared, which may be required under applicable laws, or as a matter of good practice.

Since coming into effect in September 2025, the EU Data Act (Regulation (EU) 2023/2854) introduces considerations and protections for businesses using cloud services. Primarily, businesses procuring cloud services should build Data Act obligations into contracts at the outset, as they have with GDPR obligations.

Compliance

When companies move their information to the cloud, they must ensure they are compliant with service laws and regulations – this can create hurdles in cloud storage and backup services.

IP

Another key legal issue surrounding cloud computing is intellectual property. Businesses must protect their IP rights when using cloud computing services. This includes ensuring that internal IP policies are in place and that the company has established appropriate contractual arrangements with its cloud computing service providers.

Businesses must also ensure that they have appropriate measures in place to protect their IP when using cloud computing services. This may include implementing appropriate access controls, encryption, and other security measures to ensure data integrity and confidentiality.

Contractual issues

Finally, businesses must ensure that they negotiate effective cloud computing contracts with their service providers. These contracts should set out the service provider's responsibilities and include appropriate service level agreements (SLAs) and other contractual provisions. Liability issues are crucial and influence the pricing of the underlying service. Liability caps and their exclusions are vital as market practices develop in this area.

Businesses must also guarantee appropriate exit strategies are in place when using cloud computing services. This may include establishing proper data backup and recovery procedures, as well as ensuring that the company has suitable termination clauses in its contracts with service providers.

Other issues which are core to good governance in selecting and contracting with a cloud provider include:

• access to the stored data for customers;
• access to the stored data for law enforcement;
• liability issues, including for any failure of service and cloud-targeted cyber attacks;
• service levels and service credits;
• jurisdiction and governing law;
• use policies;
• insurance matters;
• renewals and notice periods;
• subcontracting; and
• transitional arrangements when service migration occurs.

Summary

Cloud computing has become an essential part of all modern business operations, providing organisations with an efficient and cost-effective way to store, process, and manage data. However, the use of cloud computing also creates a range of legal challenges that businesses must navigate.

This guide explores the key legal issues surrounding cloud computing, including data protection and privacy, IP, and contractual issues. It provides practical guidance on how businesses can navigate these issues and highlights the importance of having appropriate policies and contractual arrangements in place when utilising cloud computing services.

It can also be a valuable resource for businesses seeking to use cloud computing services, helping them make informed decisions about adoption and manage the associated legal risks.