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Data Privacy and Security Compliance in Cloud Computing: Is Your Startup Ready?

Thousands of organizations migrate to the cloud, every week. Besides allowing for much better optimization of Information Technology resources, cloud solutions offer limitless scalability and excellent flexibility; that too at a very reasonable cost. However, cloud migration has its pitfalls in the myriad regulations designed to ensure the privacy and security of data. While most of these have been in the picture for quite a while now, many fledgling and mid-size companies still struggle to comply with some of these while integrating cloud computing services.

Let’s look at five of the most important regulations for data privacy and security in cloud computing, that could be applicable to your tech startup.

Common Regulations


Although one might think of it as primarily a European issue, the General Data Protection Regulation (GDPR) applies to businesses located anywhere, that collects, stores, or transmits personal data belonging to residents of the European Union (EU) and the European Economic Area (EEA).

The GDPR requires organizations to:

  • Get consent from consumers to collect personal data, with its level depending upon the data type.
  • Use collected user-data only for well-defined business goals, without changing the purpose at whim.
  • Allow users to opt-out of data collection and get their own collected data deleted.
  • Delete user information post the agreed-upon retention period.
  • Ensure that the designs of their systems and applications do not leave them exposed to risk.
  • Manage the risk involved in uncontrolled distribution of user-data to third parties.
  • Notify users on the reason for the data collection, the mechanism of its processing, and also data breach events.
  • Enforce compliance of these guidelines by their service providers who may even store the outside the EEU.


One of the newest regulations that have added to the challenges ensuring data privacy in cloud computing is the California Consumer Privacy Act (CCPA). Potentially acquiring a California resident’s data could bring any company under CCPA regulations and make it liable to lawsuits for data breaches and failing to ensure consumer data privacy.

The CCPA is meant to oversee the privacy of a wide range of user data, including:

  • Cookies
  • IP addresses
  • Internet activity
  • Biometric data
  • ‘Household’ data captured by IOT devices 

Consumer rights under CCPA:

  • To know when and why a company collects or sells their personal data
  • To access their data
  • To have the data deleted
  • To opt of collection or selling of their data 
  • To receive equal services at same cost

Regulations for the Finance Industry


Applicable to financial institutions of all types and sizes, the Gramm-Leach Bliley (GLB) Act includes rules for both data security and data privacy in cloud computing. Here are the important mandates of these rules.

Security Rule:

  • Financial institutions must create and implement a documented information security plan. The plan must detail all the processes involved in securing customer data.
  • They must also create, implement, maintain and test risk analysis programs for each of their departments dealing with private information. 
  • If there are changes to the processes in data collection, storage and usage, they must update their security measures accordingly.

Privacy Rule:

  • Organizations must notify customers when they collect any private data, and also once every year since then.
  • The notice has to explain how the collected information is intended to be used, and if being shared, with whom. It should also describe the institutions’ data protection measures.
  • It must also be mentioned in the notice that the user reserves the right to opt-out of their information being shared with third parties. 


In contrast with the other regulations on this list, which are all enforced by governments, the Payment Card Industry Data Security Standards (PCI-DSS) is a non-governmental regulation. Developed, maintained and enforced by an independent global organization of leading credit card companies—the Payment Card Industry Security Standards Council (PCI SSC), PCI-DSS lays out security standards to protect sensitive data belonging to cardholders. 

Applicable to all companies that collect, store or relay cardholder data, the PCI-DSS describes various levels of compliance based on the volume of transactions handled by the company in the past 1 year. Even if a company employs a third-party service-provider for handling credit card payments, the security of cardholders’ data is the responsibility of the company itself. 

Compliance with PCI-DSS must be ensured in the following ways:

  • Quarterly vulnerability scans: Organizations must go through a vulnerability scan of their network and internet applications by an approved vendor every quarter. The non-intrusive scan, reviewed remotely, is meant to detect vulnerabilities that might be exploited for illegal unauthorized access.
  • Annual assessments: Organizations processing less than 6 million transactions a year are to submit a Self-Assessment Questionnaire (SAQ) or a Report on Compliance (ROC) every year. If the processed transactions are over 6 million, an organization would be audited by a PCI-SCC certified Qualified Security Assessor (QSA)

Regulations for the Healthcare Industry


A set of regulations enforcing sensitive patient data protection, the Health Insurance Portability and Accountability Act (HIPPA) is applicable to what is known as ‘Covered entities.’ It not only includes providers of treatment, health plans, operations and payments in the healthcare space, but also applies to the businesses associated with them who have access to patient data. 

HIPAA sets the standard for the privacy and security of protected health information (PHI) which includes:

  • Patient’s physical and mental health conditions
  • Records of received healthcare
  • Payments for such healthcare services
  • Basic information like name, address, DOB and SSN. 

Privacy Rule: 

It covers all PHI stored or transmitted digitally, physically or orally, by any of the applicable entities.

Security rule: 

Focused only on digital PHI, the security rule requires that businesses implement all appropriate measures—administrative, physical and technical—for:

  • Ensuring the privacy, security and accessibility of all PHI created, received, maintained and transmitted by them 
  • Detecting and preventing reasonably anticipated security threats, illegal uses and data leaks
  • Enforcing compliance by employees and associates 

The Way Forward

Visualizing modern day Information Technology without cloud computing services and solutions is next to impossible. Cloud computing would remain at the top of the IT stack for years to come. But the rise of data privacy and security regulations in cloud computing would only mean that businesses need to be careful and judicious in their use of this marvelous technology.

If you’re still unsure about whether any of these regulations apply to your business or how to safeguard yourself from possible lawsuits due to non-compliance, the expertise of an experienced cloud computing service provider could be useful.

Josh Software has facilitated the cloud migration of leading businesses around the globe, using secure architectures that ensure compliance with all data security and privacy regulations that could be potentially applicable.

Leverage the power of cloud computing without worrying about data breaches and accidental non-compliance.

Get in touch to learn more.

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