Canada: Cyber Liability Blog 6: Cloud Computing

Last Updated: May 27 2016
Article by Laura Emmett

What do Jennifer Lawrence, Kate Upton, Hugh Grant and Scarlett Johansson have in common? They were all victims of cellphone cyber-attacks. With reoccurring headlines in the tabloids and on the news, it seems that every other week a different celebrity has fallen victim to the dreaded iCloud hack. Often, as a result, naked pictures or extremely personal information about the celebrity is leaked for the public to view. How each celebrity's iCloud account was hacked differs; however, the common denominator in each story is that the person decided to store their information virtually, subscribing to a service which they thought would house and protect their information. Many Canadians, including several businesses, have decided to opt for this type of storage because of the convenience and sense of security that one receives, believing they have taken measures to protect their private information. However, in opting to use this type of storage to house this personal information from their cell phones, computers and other software technology, many people aren't aware of: (1) how that information is being stored; (2) what type of security measures are in place; and (3) who can have access to that information.

This type of remote data storage, that so many individuals and companies rely upon, is called Cloud Computing. Cloud Computing can be defined as the practice of using a network of remote servers hosted on the Internet, to store, manage, and process data, rather than using a local server or a personal computer. Cloud Computing can also include other functions of the business, such as payment services and marketing and productivity tools.

What makes Cloud Computing so attractive to a business, especially a small to medium sized business, is that it can offer powerful software at very competitive prices. The software allows for a business to customize the services to fit their needs while at the same time allowing access from nearly any device that connects to the internet. With the numerous advantages that Cloud Computing can offer to a company, it only makes sense that the use of these services will continue to grow. In fact, Gartner Analysts has predicted that by 2017, the public cloud services market will exceed $244 billion.1

Although Cloud Computing can offers several benefits to a company in the operation of their business, it can also expose the company to significant risks, which already been highlighted above. The very purpose of Cloud Computing is to send your data to someone else for them to deal with it, and as such, it is being placed in the hands of someone outside of your business. By handing your data over to a third party, you immediately lose control over how the data will be stored and protected. This can lead to mishaps like what we have frequently seen with celebrity iCloud accounts being hacked.

A further concern is that most customers who have provided their information to a business are not aware that the company is using Cloud Computing services. A customer not having proper awareness of how their personal information is being stored could potentially result in an infringement of the Personal Information Protection and Electronic Documents Act2 ("PIPEDA") legislation, or the amending legislation, the Digital Privacy Act,3 ("DPA"). Under the PIPEDA, personal information is defined as any information about an identifiable individual. Further, section 4(1) of the PIPEDA states that the Act applies to every organization that collects, uses or discloses personal information in the course of commercial activities.4

In 2015, the DPA, amended the PIPEDA, to include further provisions, and specifically section 6.1 was introduced to address the issue of consent. This section states that for there to be valid consent from an individual in the collection of their personal information, it needs to be reasonable to expect that the individual would understand the nature, purpose and consequences of the collection, use or disclosure of the personal information to which they are consenting.5 Therefore, with the introduction of this section, companies need to ensure they are fulfilling their responsibilities in protecting customer confidential information. This is done by informing customers about how their information will be stored.

Businesses also need to consider whether the use of Cloud Computing services would impact the effectiveness of any Cyber Insurance policy that may be in place. Before implementing the use of Cloud Computing services, consideration should be given to your Cyber Insurance policy to ensure that protection is still provided when data is stored by a third party. Specifically, the language of the policy should be reviewed to understand how terms like "computer network" or "computer system" are defined in your policy. Additionally, businesses should also review any agreement with the Cloud Computing service provider to understand what exposure to liability the Cloud Computing service provider is willing to take on, and as such, what level of protection and security will be afforded to your personal data. It is more likely than not that Cloud Computing service providers will accept very little to no liability, leaving the bulk of the liability on the business, should anything happen. In such instances, the company should ensure that proper coverage is obtained under their own insurance policy.

1"Forecast: Public Cloud Services, Worldwide, 2011-2017, 3Q13 Update" (September 27, 2013) Gartner online:
2Personal Information Protection and Electronic Documents Act, SC 2000, c 5 [PIPEDA].
3Digital Privacy Act, SC 2015, c 32.
4PIPEDA, supra note 2 at s. 4(1).
5PIPEDA, supra note 2 at s. 6.1.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Laura Emmett
In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions