But in addition, the government's approach should terrify any user of cloud computer services—not to mention the providers. The government maintains that Mr. Goodwin lost his property rights in his data by storing it on a cloud computing service. Specifically, the government argues that both the contract between Megaupload and Mr. Goodwin (a standard cloud computing contract) and the contract between Megaupload and the server host, Carpathia (also a standard agreement), "likely limit any property interest he may have" in his data. (Page 4). If the government is right, no provider can both protect itself against sudden losses (like those due to a hurricane) and also promise its customers that their property rights will be maintained when they use the service. Nor can they promise that their property might not suddenly disappear, with no reasonable way to get it back if the government comes in with a warrant. Apparently your property rights "become severely limited" if you allow someone else to host your data under standard cloud computing arrangements. This argument isn't limited in any way to Megaupload -- it would apply if the third party host was Amazon's S3 or Google Apps or or Apple iCloud.
