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Cloud Computing and Security Data protection in Amazon Web Services Is the data of European data subjects sufficiently protected in Amazon Web Services? Master Thesis Leonie Christina Sophia Peters LLM Law & Technology SNR: 2047526 ANR: 384253 Date: 18 June 2020 Tilburg University (2019-2020 Academic session) Supervisor: Bo Zhao - LTMS department Second reader: Colette Cuijpers - LTMS department Table of Contents List of abbreviations ................................................................................................................. 3 Chapter one: Introduction ....................................................................................................... 4 1.1 Introduction – ‘Cloud Computing’ ................................................................................... 4 1.2 Existing literature and gaps in the literature ..................................................................... 6 1.3 Research questions ........................................................................................................... 7 1.4 Methodology and method ................................................................................................. 9 1.5 Outline of the thesis .......................................................................................................... 9 Chapter two: cloud computing and security ........................................................................ 10 2.1 What is ‘cloud computing’? ........................................................................................... 10 2.1.1 How is data handled and transferred in the cloud? ................................................. 12 2.2 Structure of Amazon Web Services ............................................................................... 13 2.3 Privacy and data protection challenges of ‘cloud computing’ ....................................... 15 2.3.1 Privacy and data protection challenges of cloud computing in general .................. 17 2.3.2 Privacy and data protection challenges in Amazons Web Services ........................ 23 2.4 End remarks .................................................................................................................... 33 Chapter three: Cloud regulation .......................................................................................... 34 3.1 Data protection regulation in the United States and the European Union ..................... 34 3.2 Data protection regulation on data transfers in the European Union ............................. 37 3.2.1 The EU-US Privacy Shield ..................................................................................... 39 3.3 Data protection regulation in the United States ............................................................. 42 3.3.1 The CLOUD Act ..................................................................................................... 43 3.3.2 Disclosure of data to law enforcement by Amazon ................................................ 45 3.4 End remarks .................................................................................................................... 48 Chapter four: Amazon Web Services contract and legal remedies ................................... 50 4.1 Data protection clauses in an AWS contract .................................................................. 50 4.2 Liability, consequences, safeguards and remedies of a data breach in Amazon’s cloud for European data subjects ................................................................................................... 57 4.2.1 Consequences of a data breach in Amazon’s cloud ................................................ 58 4.2.2 Remedies and liability in the European Union ........................................................ 59 4.2.3 Remedies and liability in the United States ......................................................... 62 4.2.4 Arrangements for legal remedies in the EU-US Privacy Shield ............................. 69 4.3 Closing remarks .............................................................................................................. 71 Chapter five: Conclusion ....................................................................................................... 73 2 Reference list ........................................................................................................................... 77 List of abbreviations AWS Amazon Web Services AWS DPA Amazon Web Services Data Protection Addendum B2B Business-to-Business CCPA California Consumer Privacy Act CLOUD Act Clarifying Lawful Overseas Use of Data Act DPA Data Protection Authority EEA (European Economic Area) EU European Union EUCJ European Court of Justice GDPR General Data Protection Regulation FTC Federal Trade Commission IaaS Infrastructure as a Service IAM Identity and Access Management NIST National Institute of Standards and Technology PaaS Platform as a Service PII Personally identifiable information SaaS Software as a Service SSRF Server-side request forgery US United States VPC Virtual Private Cloud 3 Chapter one: Introduction 1.1 Introduction – ‘Cloud Computing’ The ability to store data online is an arising appearance. The majority of people think of Apple’s iCloud when they think of cloud computing, but it was actually Amazon who developed the first cloud.1 Amazon is still one of the biggest players in offering ‘cloud computing’ services.2 Amazon Web Services (hereafter AWS) is nowadays a new technology specifically used by a large number of international companies to store data on an on-demand resource. A web service mostly provides an object-oriented Web-based interface to a database server which provides a user interface to an end-user.3 Amazon Web Services offers cloud computing platforms and APIs to its customers.4 APIs are usually implemented with Web Services.5 People consider cloud computing as an abstract term and as one of the greatest intangible things. It appears to be so abstract that it is hardly imaginable that the majority of people and companies use it. The cloud is regarded as an innovative change of computing paradigm.6 After all, it is considered to be a one all-embracing concept, while in fact it encompasses many different things.7 Cloud technology is evolving rapidly.8 Policies in the areas of data protection and free flow of data struggle to keep pace.9 It is commonly recognized in the literature that cloud computing needs specific regulation and strict political oversight. Cloud computing has been recognized by the European Commission as an important part of the economic market.10 The 1 Vladimir O. Safonov, Trustworthy Cloud Computing (1st edn, John Wiley & Sons, Incorporated 2016), p. 5. 2 Timane, Rajesh, ‘Analysis of Cloud Computing Market Players. International Journal of Research in IT & Management’ [2011] Vol. 1, no. 5, ISSN 2231-4334 96, p. 96. 3 Wikipedia, ‘Web service’ <https://en.wikipedia.org/wiki/Web_service> accessed on 25 May 2020. 4 Wikipedia, ‘Amazon Web Services’ <https://en.wikipedia.org/wiki/Amazon_Web_Services> accessed on 14 June 2020. APIs is an application program interface and allows the creation of an interface which is stable and can be used to access the underlying system or data by other software systems. Service Architecture, ‘Application Program Interfaces’ <https://www.service-architecture.com/articles/web- services/application_program_interfaces_apis.html> accessed on 14 June 2020. 5 Service Architecture, ‘Application Program Interfaces’ <https://www.service-architecture.com/articles/web- services/application_program_interfaces_apis.html> accessed on 14 June 2020. 6 Vladimir O. Safonov, Trustworthy Cloud Computing, (1st edn, John Wiley & Sons, Incorporated 2016), p. 1. 7 Christopher Millard, Cloud Computing Law (Chapter 1, 1st edn, Oxford University Press 2013), p. iv. 8 Renee Berry and Matthew Reisman, ‘Policy Challenges of Cross-Border Cloud Computing’ (2012) Journal of international Commerce and Economics, p. 1 <https://usitc.gov/journals/policy_challenges_of_cross- border_cloud_computing.pdf> accessed on 22 November 2020. 9 Ibid. 10 Shaping Europe’s digital future policy – ‘Cloud computing’ <https://ec.europa.eu/digital-single- market/en/cloud> accessed on 30 October 2019. 4 main role of cloud computing in Europe is established by the European Cloud Initiative and the Initiative on Building an European Data Economy.11 The European Commission states that their Digital Single Market Strategy includes a call for cooperation on digital matters at international level.12 The cooperation between the European Union and the United States on cloud computing is progressive. The dialogues between these two continents focus on exchange in best practices, common contractual aspects, SMEs13, cloud standards mapping and interoperability.14 Although, this new technology comes with a large number of advantages, it also establishes plenty of complications. Cloud computing is one of the present-day technologies which challenge the protection of our fundamental rights under the current legal systems in the world. Companies are creating gigantic databases of psychological profiles to collect data such as an individual’s name, race, gender, residence, income and purchases.15 The majority of cloud customers use cloud computing to construct these databases and a large number of companies in Europe therefore enter into a contract with Amazon on cloud computing. In these situations, it could possibly constitute a cross-border flow of data, if data of European citizens is stored on
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