SaaS Agreements – Data Protection – Prism and US Laws

SaaS suppliers should be aware of relevant US laws when outsourcing SaaS services (data storage and hosting) to US companies or companies located in the USA. SaaS customers are becoming increasingly concerned about outsourcing in the USA following media reports about “Prism”. Namely, that the National Security Agency (NSA) accesses personal data stored on the servers of Microsoft, Apple, Google, Yahoo, Facebook and a few other major US public companies. Below is a summary of the most relevant US laws that SaaS suppliers should be aware of.

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SaaS Agreements – Data Protection – The UK Patriot Act

Recently SaaS suppliers have seen a marked increase in EU customers raising concerns about disclosure of their data to US law enforcement authorities under the Patriot Act – an American anti-terrorism law – particularly where the SaaS supplier has a parent company in the USA or data is being hosted or processed in the USA. Now to add to your problems, the UK Government plans to introduce its own “Patriot Act” type law in the near future.

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SaaS Agreements – Patriot Act – Renewed Customer Concerns

Recently SaaS suppliers have seen a marked increase in EU customers raising concerns about disclosure of their data to US law enforcement authorities under the Patriot Act – an American anti-terrorism law – particularly where the SaaS supplier has a parent company in the USA or data is being hosted or processed in the USA.

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SaaS Agreements – Need for an Escrow Agreement

Having an escrow agreement in place protects all parties involved in the development, supply and use of business critical SaaS applications. It provides customers with peace of mind for securing long-term availability of a critical SaaS application by enabling customers to update software and fix any bugs even if the supplier is no longer able to support them.

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SaaS Agreements – SLA – Security Issues

As a SaaS supplier you will have noticed the increasing concerns about security voiced by SaaS customers. Your SaaS agreement should provide comfort to your customer by including security provisions in the service level agreement (SLA). The specifc matters covered will depend on a number of factors set out below.

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