Cloud Computing Law and the Co-Implication of Amazon Web Services with the Sony PlayStation Outage

Last week’s report by Bloomberg that the outage on the PlayStation Network was caused by a hacker using Amazon Web Services’s EC2 platform raises interesting questions in the newly emerging field of cloud computing law. Can Amazon Web Services be held responsible for the breach? In the event of a violation of security on one cloud infrastructure that stems from another cloud computing platform, can the originating cloud computing vendor be deemed legally responsible for the security violation? Consider the case of HIPAA legislation as it relates to the cloud, for example: as “business associates” of “covered entities” such as provider organizations, cloud computing vendors bear responsibility for security and privacy of patient health information data. A covered entity such as a hospital that stores personal health information on Amazon’s EC2 infrastructure can expect that, as a business associate, Amazon Web Services will demonstrate adherence with HIPAA’s privacy and security regulations that require data encryption, access controls, and processes for data back-up and audit review of access.

What is Amazon Web Services’s degree of liability for the Sony Outage, if any? Sources close to the investigation revealed that hackers rented one of Amazon’s EC2 servers and then deployed the attack on Sony PlayStation’s network that compromised the security of 100 million Sony customers. Amazon Web Services is likely to be subpoenaed in the investigation in order to extract details of the method of payment and the IP addresses used for the attack. That said, one would be hard pressed to imagine making a legal case that Amazon bears responsibility for the attack given that virtually any of its customers could have launched the attack and there currently exists no easy method of differentiating between criminal accounts and legitimate ones. Granted, one could make the argument that cloud computing vendors should develop the IT infrastructure to proactively identify suspicious behavior and curtail it as necessary. Given the recent proliferation of cases where hackers use rented or hijacked servers to launch cyber-attacks, such legislation may not be entirely inconceivable as the cloud computing space evolves. Right now, however, regulatory agencies such as NIST and U.S. CIO Vivek Kundra have their hands full grappling with inter-operability and quality standards for cloud based data storage and transmission, separate from formulating the legally precarious constraint that would mandate cloud computing vendors to develop processes to detect hack-attacks before they happen.