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Do you know where your data is?

Web services may offer enhanced security against viruses, hackers and data corruption. But when your data's abroad, other factors may be more worrying

Web services are taking over. If you spend longer in Google than Word or buy more online than by mail order, you'll know this. If you find Gmail more flexible, reliable and powerful than Outlook and Exchange, you'll also know why.

There is a hidden downside to Web services, one that's easy to overlook but impossible to avert. While a responsible service provider can make their systems as secure as any against malicious attack, hardware failure or unreliable software, there is little they can do against the courts. The security of your data depends on someone else's lawyers.

We have always accepted this as part of the deal of doing business within our own country. Our banks, doctors, insurance companies and other professional services hold much personal data on us: we expect their probity and the safeguards in UK law to protect us against slapdash incompetence or malevolent abuse. Even if bad things happen, there will be comeback.

Online, though, the rules are different. Personal and corporate data is increasingly held overseas; by people we don't know in places we can't see. With innovations such as Google Desktop 3, it isn't even clear what data is held where in what format — nor, if we do find out, is there any guarantee that the same will be true tomorrow.

Although you may trust Google — or Microsoft or Salesforce.com — do you trust all the jurisdictions they work in? You would probably feel uneasy about outsourcing your corporate accounts to a company in Bangladesh or Chad — joint last in Transparency International's 2005 Global Corruption Report — but America? That came 17th and has a long tradition of the rule of law, yet currently has a President who eschews legal oversight in deciding who or what can be monitored by the security agencies.

We do not expect overseas Web service providers in the developed world to be any more prone to legal or illegal disclosure of private information than those in the UK, but changing circumstances — especially in those countries with a heightened case of anti-terror paranoia — may always change that. So might changes of ownership, especially as Asian economies progress to the point where those companies are starting to expand by acquisition.

If you value your data, whether personal or corporate, the price of its safety is to be aware of whose roof it lives under. Convenience and efficiency are very important, but risk must always be part of the equation. Make sure you know what it is.