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Regulation of Cloud Services under US and EU Antitrust, Competition and Privacy Laws


Sára Gabriella Hoffman

This book examines how cloud-based services challenge the current application of antitrust and privacy laws in the EU and the US. The author looks at the elements of data centers, the way information is organized, and how antitrust, competition and privacy laws in the US and the EU regulate cloud-based services and their market practices. She discusses how platform interoperability can be a driver of incremental innovation and the consequences of not promoting radical innovation. She evaluates applications of predictive analysis based on big data as well as deriving privacy-invasive conduct. She looks at the way antitrust and privacy laws approach consumer protection and how lawmakers can reach more balanced outcomes by understanding the technical background of cloud-based services.

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3 What is the cloud?


3 What is the cloud?

„It’s called “cloud computing” because the old programs to draw network schematics surrounded the icons for servers with a circle. A cluster of servers in a network diagram had several overlapping circles, which resembled a cloud.“ – Schmidt/Rosenberg (2014)37

This Chapter is dedicated to cloud infrastructure, the innovation it entails and the physical and legal surroundings the cloud requires. Cloud computing has been around since the 1950s. The first cloud architecture was presented by AT&T, a telecommunications company in the U.S., which centralized data storage for this company.38 Salesforce forecasts that the market for cloud services will exceed USD 241 billion by the year 2020.39

A legal assessment of cloud services must start with an understanding of the market and its components. This chapter looks at what cloud computing and data centers are. It will shed light on the type of innovations cloud computing brings and what benefit can be derived from implementing a cloud solution. Furthermore, it looks at the cloud architecture, its cost structure and pricing models.

3.1 Definitions and variations of cloud computing

Cloud computing is the use of centralized information and infrastructure facilities that can be accessed locally on demand via an internet connection.40 The “cloud” may also be seen as an acronym: Common, Location-independent, Online, Utility and available on Demand.41 The U.S. National Institute of Standards and Tech←45 | 46→nology (NIST) provided a working definition of cloud...

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