While cloud storage can be an economical and practical method for storing data and information, use of the cloud may result in reduced privacy protection.  When using cloud storage, an individual or a company uses storage capacity provided to it by a third party instead of maintaining its own files.  Although one may not intuitively view this distinction as significant, there is case law (US v. Miller (1976)) which allows such information to be treated differently for privacy purposes.  Law enforcement agencies argue that because a file has been turned over to a third party, the file does not have the same privacy protections it would if it were held by the creator.  The significance of the government’s approach becomes increasingly important as more and more files are being turned over for third party storage.

Those in favor of the government’s right to access such information would argue that one does not have a reasonable expectation of privacy once they turn over the information to a third party.  However, is this how individuals and corporations think of the issue when storing information on the cloud?  While most people would likely acknowledge that there is a set of privacy concerns associated with cloud storage, these concerns generally stem from the fact that the information is being stored on the internet and the third party to which the information is turned over may not be trustworthy.  A reasonable expectation of privacy in email was acknowledged in a recent Sixth Circuit decision, US v. Warshak (2010), but it remains to be seen how this will impact the law in the area.

The main statutory provision which protects wire, oral, and electronic communications is the Electronic Communications Privacy Act (ECPA).  Title II of the ECPA, the Stored Communications Act (SCA), protects communications held in electronic storage.  The ECPA has not undergone a major revision since being enacted in 1986 and its privacy standards are wildly out of sync with much of the computer activity which occurs today.  Take, for example, the fact that Email can be accessed by the government without a warrant if it has been left on a server for more than 180 days.  When the law was passed, Email was generally downloaded.  Therefore, the law considered email which remained on a server for more than 6 months to be abandoned.  Today, however, email is regularly kept and stored on servers, yet the law still considers email left on a server abandoned and allows law enforcement to access it without a warrant.  This leads to POP and IMAP email services to be treated asymmetrically.

An organization called Digital Due Process (a coalition of many of today’s most prominent internet companies) has laid out its major principles for bringing the ECPA up to date with today’s computing needs.  These principles include required use of warrants in order for government entities to require that private information from entities covered by the ECPA be turned over, and requirement that more particularized evidence be provider in order for governmental entities to receive subpoenas.  Senator Patrick Leahy has introduced a bill in the Senate which corresponds with many of these ideas.

While these reforms are necessary to align the law with the current state of the internet they are unlikely to be implemented any time soon. The major roadblocks to enacting this change come from the law enforcement and the cloud computing industry itself.  Obviously law enforcement wishes to continue the practices in which they currently take part and want investigative procedures to remain as simple and quiet as possible. At the same time, the cloud computing industry is caught in a tough position.  On the one hand cloud computing providers want to back data and privacy protections insofar as they encourage individuals and corporations to embrace the cloud and utilize their services.  However, the cloud providers want to continue to access individuals data for their own informational purposes (see Amazon terms of service regarding consumer files, particularly 5.2) and do not want to back any laws which might increase privacy protections and inhibit their use of consumer data.

Apple claims that Samsung only partially complied with a court order requiring Samsung to release source code for products involved in a patent suit.

European Union competition regulators are questioning Europe’s biggest telecommunications companies regarding the possibility of collusion based on a series of meetings held since 2010.

A Dutch court rejected Samsung’s attempt to ban sales of Apple’s iPhone and iPad in the Netherlands.

The SEC has brought charges against an online trading platform and two private funds which were offering Facebook shares prior to the initial public offering.

Taiwanese company AU Optronics Corp. will appeal a guilty verdict in the US over price fixing on LCD screens.

The trial regarding whether Google violated Oracle’s intellectual property rights related to Java has been set for April.

Yahoo is suing Facebook over ten patents that include methods and systems for advertising on the internet.

AT&T presented three main points designed to show that the cases by Sprint and
Cellular South should be dismissed. First AT&T argues that because Sprint and Cellular South are competitors—not consumers—in this market, both lack standing to bring an antitrust suit. The economic justification behind enjoining a horizontal merger among competitors, such as AT&T and T-Mobile, is based on the theory that the merger will lead to a more concentrated and less competitive market which will, in turn, lead to higher prices and reduced innovation. AT&T argues that even if the merger were to result in less competition and higher prices—a result AT&T says would not occur—any losses would be felt by consumers not competitors. AT&T goes on to argue that what Sprint and Cellular South are actually concerned about is increased competition from a more efficient unified AT&T/T-Mobile. AT&T argues that antitrust law does not provide any recourse for a competitor’s concern about losses resulting from a rival’s increased efficiency and competitiveness. AT&T also submitted a very powerful piece of evidence against Cellular South in this case. In their motion to dismiss the case, AT&T included an email it received from Hu Meena, CEO of Cellular South. Mr. Meena wrote that if the companies came to an agreement through which Cellular South would build a next generation LTE network in Mississippi which AT&T would use for roaming, and AT&T guaranteed reasonably priced access to its networks for Cellular South’s roaming needs for the next 10 years, Cellular South’s antitrust concerns would be alleviated. AT&T used the email to suggest that Cellular South was exploiting the lawsuit as a way of advancing its own strategic interests.

AT&T’s second point is a response to claims by Sprint and Cellular South that an AT&T/T-Mobile merger will reduce Sprint’s and Cellular South’s access to new wireless devices. Sprint and Cellular South argue that after the merger AT&T will be able to “coerce exclusionary handset deals” from device manufacturers effectively freezing competitors out of the market. AT&T responds that it is well recognized that exclusive handset deals are generally pro-competitive and encourage company differentiation. The only way that exclusive deals hurt competition is when they allow one party to unreasonably deprive another of access to goods. AT&T argues that such an outcome is extremely unlikely in this market as there are a great variety of handset manufacturers who produce many different handset models. Between 2006 and 2010 the number of handset manufacturers that distribute their products in the U.S. market increased from 8 to 21 and these manufacturers produced 302 different models. Therefore, AT&T contends that Sprint and Cellular South failed to provide any factual allegations which indicate they would be frozen out of the handset market.

AT&T’s final point was in response to claims by Sprint and Cellular South that the merger would have an effect on the market for roaming services. AT&T argues that Sprint fails to point to any effect on a market for roaming services in which Sprint is a participant. Sprint does not currently purchase roaming services from either AT&T or T-Mobile, nor would it be possible for them to do so. Sprint’s cell phone network uses CDMA technology which is incompatible with the GSM technology used by AT&T and T-Mobile. Cellular South uses GSM service for less than 3 percent of its customers and fails to show that it would be affected. AT&T goes on to argue that any claims by Sprint or Cellular South which state that the merger would increase the price they pay for Verizon roaming services lack any factual basis. AT&T argues that both Sprint and Cellular South are ignoring the fact that FCC regulations require all mobile wireless carriers to provide roaming on a just, reasonable and non-discriminatory basis.

Regardless of how one feels about the competitive effects of an AT&T/T-Mobile merger on the wireless industry, whether there is anything to gain by allowing Sprint and Cellular South to sue on the back of the DOJ is a separate question. The DOJ and the seven state attorneys general which have joined in the suit (New York, Washington, California, Illinois, Massachusetts, Ohio and Pennsylvania) seem well positioned to represent the welfare of wireless consumers and it is difficult to see what additional benefits would be provided by allowing wireless companies, primarily concerned with the merger’s effects on their own bottom lines, to sue as well. It is now up to Sprint and Cellular South to show why their suits should be allowed.  Oral arguments in the case are schedule for October 24^th.