IBM, Intel, Google oppose 'Cloud Bill'

By Yoon Sung-won

Leading foreign technology giants Google, Intel, IBM and Hewlett-Packard said Monday that they plan to oppose a local bill on cloud computing systems.

The Ministry of Science, ICT and Future Planning (MSIP) is seeking approval for a bill from the National Assembly that will allow government organizations to use private companies’ cloud services.

This is an attempt by the Korean government to cut Korean companies’ heavy reliance on foreign firms for cloud computing.

"The bill includes some mandatory provisions that are difficult to follow for foreign companies, thus putting them at a disadvantage in the market," said a spokesman at IBM Korea by telephone.

Emphasizing that all the companies have agreed upon opposing the bill, the spokesman said the changes can be interpreted as discrimination against foreign companies.

“Foreign companies have to follow much stricter rules about information releases set by their headquarters. On the other hand, domestic firms can react to such government requests more flexibly. We have different standards on information privacy,” he said.

“Policymakers should consider political measures such as tax cuts and the provision of subsidies to enhance the local cloud computing service industry, instead of regulations that put excessive obligations on businesses," an official at Intel said.

In an statement they delivered to the National Assembly Future Planning, Science, Broadcasting and Communications Committee, Dec. 16, the companies said that despite the need for government policy for industrial growth and customer protection, the current bill that says the government decides public organizations’ use of cloud services, may become regulation for the entire cloud service industry.

They also raised questions about the bill’s provisions that obligate service providers to follow strict rules such as standardized terms and conditions, information release to protect cloud computing service customers, compensation and correction orders.

Lawmakers from both the ruling and opposition parties have argued that the provision empowers the National Intelligence Service to supervise public organizations’ use of cloud services, and may cause problems such as the illegal monitoring of private data.

Domestic cloud computing companies, represented by the Korea Association of Cloud Industry, the Consortium of Cloud Computing Research and the Cloud Service Association Korea, have urged the National Assembly to pass the bill within the year.

The three bodies pointed out that the existing legal system is restricting the growth of the local cloud computing industry.

“The bill that promotes the cloud industry is much needed to improve the quality of local cloud services and to secure proper customer protection for data breaches,” they said in a joint statement Dec. 9.

However, expectations are that the passage of the bill within the year is unlikely as all the legal procedures scheduled on Dec. 17 have been postponed due to the “memogate” scandal involving Cheong Wa Dae.

“The bill will give new opportunities to the domestic cloud computing industry. Without it, the domestic market may be predominated by global enterprises with enormous capital strength and advanced technology,” said Min Young-ki, an executive at Korea Association of Cloud Industry.