Germany: Cloud Computing May Violate German Data Privacy Laws

Last Updated: 23 July 2010
Article by Tim Wybitul, Dr. Andrea Patzak and Dr. Guido Zeppenfeld, LLM

Originally published July 20, 2010

Keywords: cloud computing, Germany data privacy laws, personal data protection + transfers, restrictions, requirements, outsourcing arrangements, new requirements

The term "Cloud Computing" is generally used to describe services through which a company accesses software applications, databases, infrastructure and related services via the Internet or other networks. The use of Cloud Computing is growing substantially worldwide due to the cost savings and other benefits it provides. Due to concerns regarding personal data protection and transfers, German data protection authorities want to impose tougher restrictions and requirements on both Cloud Computing and other outsourcing arrangements involving personal data. Companies need to ensure that they are complying with these strict new requirements. Failure to comply with these laws may result in substantial fines, civil lawsuits and reputational damages.

The German Data Protection Authority's Statements

The Data Protection Authority of the German Federal State of Schleswig-Holstein (the Unabhaengiges Zentrum fuer Datenschutz Schleswig-Holstein – "ULD") recently published on its web site a white paper that covers data privacy aspects of Cloud Computing. The opinions expressed in the ULD's paper are not legally binding on companies operating in Schleswig-Holstein or other German federal states. However, the ULD's published views indicate the manner in which the ULD will view and examine Cloud Computing arrangements. The ULD views may also influence data protection authorities in other German states. In the paper, the ULD expresses concern that many transfers of personal data in connection with Cloud Computing arrangements will not satisfy requirements under German data privacy laws. The ULD called out "Public Clouds" in particular, but the concerns are not limited only to Public Clouds.

The German Data Protection Act (Bundesdatenschutzgesetz – "BDSG") implements the EU Data Protection Directive. Section 11 of the BDSG specifically addresses requirements that data controllers must follow regarding data processors. Section 11 previously did not apply to data controller to data processor transfers outside of the European Union. Now, however, the ULD has taken the position that Section 11 does apply to transfers of personal data outside of the European Union. The result is that, according to the ULD, reliance solely on the EU standard data transfer clauses (one of the more common means for accomplishing a compliant data transfer) for data controller to data processor transfers in a Cloud Computing engagement is not enough to satisfy German data privacy laws. In addition to the standard clauses, data controllers will also have to comply with Section 11 requirements of the BDSG.

Regardless of whether the Cloud Computing provider is located inside or outside of the European Union, the ULD demands that companies using Cloud Computing services must take adequate measures to safeguard the integrity and security of the personal data processed. For example, companies must include contractual provisions with Cloud Computing service providers in accordance with the criteria for data controller/data processor relationships (Auftragsdatenverarbeitung) set forth in Section 11 BDSG – regardless of the location of the Cloud Computing provider or the services.

In addition, according to the ULD, companies or qualified external third parties must exert "regular control" over whether Cloud Computing providers observe the restrictions of the BDSG. The control must cover the processor's technical and organizational measures used to protect the data. Neither the BDSG nor the data protection authorities provide any extensive guidance on what regular control means, or how it will be interpreted. The ULD has suggested that companies can do this in at least two ways: they can obtain expert advice, in the form of audits or certificates provided by external experts, that the service provider observes the legal restrictions; or they can obtain a binding guarantee declaration by the service provider in which the service provider provides a comprehensive commitment to obeying the obligations imposed by the law.

Data Transfer to Countries Outside the European Union

When personal data is transferred outside of the European Union in connection with the Cloud Computing services, in addition to complying with Section 11 of the BDSG, the transfer must be accomplished by one of the permitted means. One widely used method is to employ the EU-approved standard clauses for transfer of personal data. Until recently, the Safe Harbor Agreement was also a permissible means of accomplishing personal data transfers from the European Union to the United States. However, German data protection authorities recently announced that they no longer regard Safe-Harbor certifications of US companies as a stand-alone basis for fulfilling German data privacy standards. (For more information about the stricter requirements set out for German companies regarding the Safe Harbor certification, see

The ULD gave examples of situations in which Cloud Computing arrangements could satisfy the German data protection and transfer laws. Please note that the ULD requires that the requirements of Section 11 of the BDSG are also to be satisfied in these arrangements. Some of the examples, however, bear little resemblance to actual business practices and Cloud Computing service offerings.


    A Cloud Computing provider may offer its customers the option to restrict data processing to countries which are part of the European Economic Area (EEA) or the European Union.

    Cloud Computing services may be provided in and from any jurisdiction for which the EU Commission has deemed to have an adequate level of protection pursuant to Sec. 4b Subsec. 2 Sent. 3 BDSG.

    The company using the Cloud Computing services may comply via (i) use of standard contractual clauses and (ii) satisfaction of the requirements of Section 11 of the BDSG. As mentioned above, use of the standard clauses was thought to be sufficient to accomplish a compliant data transfer.

    There are questions regarding the ULD's view and application of Section 11 of the BDSG to data transfers outside of the European Union. Previously, Section 11 was thought to apply to data processing within the European Union, and not to transfers of personal data for processing outside of the European Union. The ULD's application of Section 11 to data processing outside of the European Union extends the prior reach of Section 11. Despite these questions, other German state data protection authorities are likely to share the ULD's view and enforce these requirements.

    Though Binding Corporate Rules (BCR) have previously applied to intercompany and multinational affiliated company transfers of personal data, the ULD has suggested that BCR might be adapted to cover non-affiliated processors. This view is not yet officially approved by the EU Article 29 Working Group (the EU advisory body that coordinates data protection activities among the EU member states), and its application and use for transfers to third-party processors, including Cloud Computing providers, remains to be seen.

What Your Company Should Do

If you have existing Cloud Computing service arrangements, or other outsourcing arrangements involving personal data from Germany, you should review these arrangements with counsel to ensure that they continue to meet the requirements of the German data protection authorities. If you are considering entering into a Cloud Computing service arrangement involving personal data from Germany, you should review the ULD requirements with German lawyers to ensure that you structure the arrangement, contracts and control measures in a manner that satisfies the new and changed requirements under German data protection laws. You should also monitor the developments both in Germany and other EU countries. As the use of Cloud Computing increases, other EU data protection authorities are certain to provide their opinions and guidance on personal data protection and Cloud Computing.

Other Related Data Protection Developments in Germany

The ULD white paper is only one of several recent developments in personal data protection. There have been several scandals involving large German companies disregarding binding BDSG provisions. Recently, the joint coordination committee, in which all German data protection authorities align their regulatory actions (the so-called Duesseldorfer Kreis), passed strict control requirements for companies transferring personal data to Safe Harbor-certified data recipients in the United States. In addition, the German government is currently preparing new legislation regarding employee data protection.

Generally, the importance of data privacy as one major part of corporate compliance in Germany has increased substantially during the last few years – and it can safely be assumed that this trend will continue. As a consequence, companies operating in Germany need to stay current with these developments, and review their data privacy compliance programs.

Learn more about our Privacy & Security practice.

Visit us at

Mayer Brown is a global legal services organization comprising legal practices that are separate entities ("Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP, a limited liability partnership established in the United States; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales; and JSM, a Hong Kong partnership, and its associated entities in Asia. The Mayer Brown Practices are known as Mayer Brown JSM in Asia.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

Copyright 2010. Mayer Brown LLP, Mayer Brown International LLP, and/or JSM. All rights reserved.

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.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please 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