The main concern is to do with a clash between amendments to the EU Data Protection Act – which includes the so-called “right to be forgotten” – and the US Patriot Act, which enables authorities to search telephone, email, and financial records without a court order.
And the Yanks have the arrogance to complain about Aussies storing data in Australia!
Sorry, but under the US Patriot Act, the US government has granted themselves unlimited, and secret access to any and all data stored on a US server.
I've done some contract work for the Canadian Government, and it is illegal to store certain kinds of information on US based servers because it would potentially violate Canadian law. There are companies who have arms-length subsidiaries whose job it is to handle government data that could not be allowed to be stored in the US. This is no different than similar issues [zdnet.com] with US owned companies [eweek.com] accessing EU [pcworld.com] data [forbes.com] because of the Patriot Act.
The US can claim their companies are being hurt by this, but the fact of the matter is, the US is not a trustworthy place to store your data unless you are also going to accept them potentially spying on your citizens.
It's a clear signal to people that if you run a business and your server is in the US, the US can kill your business stone dead in a raid which may have nothing to do with you other than being co-hosted at a server farm. And people wonder why less business is going to the US.