CLOUD

Clarifying Lawful Overseas Use of Data

A U.S. law enacted in 2018 designed to address how law enforcement can access electronic data stored in cloud services, even when that data is held on servers located outside of the United States. Because modern identity management systems frequently rely on cloud infrastructure to store and process personal data, the CLOUD Act has significant implications for identity regulation and global digital trust frameworks.

Purpose of the CLOUD Act in Identity Regulation

The CLOUD Act was introduced to resolve legal conflicts that arose when U.S. law enforcement sought access to data stored abroad by American technology companies. By clarifying the obligations of cloud service providers, the act ensures that government authorities can request identity and other digital records under lawful circumstances, while also allowing for reciprocal agreements with foreign governments.

For identity regulation, this means that cloud-hosted identity data—such as authentication logs, user credentials, and verification records—falls under clear rules for lawful access and cross-border handling.

Core Principles

• Lawful access: Defines conditions under which U.S. authorities can compel cloud providers to disclose identity-related data, regardless of where it is physically stored.
• International agreements: Establish frameworks for bilateral and multilateral agreements, so that foreign governments can also request identity data under aligned legal standards.
• Privacy protections: Seeks to balance law enforcement needs with privacy safeguards, limiting requests to situations where legal thresholds are met.
• Global impact: Influences how cloud providers structure their storage strategies, often requiring businesses to evaluate how identity data is distributed and protected across jurisdictions.

Relationship to Broader Identity Regulations

While the CLOUD Act is a U.S. law, its reach is global due to the dominance of U.S.-based cloud service providers. It intersects with identity regulations such as the EU’s General Data Protection Regulation (GDPR) and eIDAS 2.0, as well as national trust frameworks like Australia’s TDIF. These frameworks emphasize user consent, data sovereignty, and assurance levels, whereas the CLOUD Act primarily defines lawful access obligations for providers. Together, they create a complex compliance environment for identity systems that operate internationally.

Business and Consumer Impact

For businesses, the CLOUD Act means identity systems that rely on U.S.-based cloud infrastructure must account for potential lawful access requests by U.S. authorities. This can affect multinational corporations, financial institutions, and any service managing personally identifiable information (PII). For consumers, the act raises awareness of how their digital identity data might be accessed under legal compulsion, highlighting the importance of transparency and trust in cloud-based services.