http://bits.blogs.nytimes.com/2009/02/23/does-cloud-computing-mean-more-risks-to-privacy/
Recently, there was a post about about cloud computing not allowing for privacy. I think that there are two separate issues regarding privacy.
- Security of the platform. The platform that is running your application must be secure. If the platform is not secure, who knows what will happen. Anyone can get it. You need to trust the platform that you are running on and the vendor of that platform.
- Security of the network. Network access must be secure. If someone gets through your network security to your application, you aren't very secure.
- Security of the application. The application you are running on must be secure. Think sql injection, clear passwords, http/https, and that kind of stuff.
- Working with your vendor. If you are storing data in someone else's application (Facebook, Twitter, Salesforce), make sure that you understand the agreement that you have signed.
Another thing to look at is the difference between the Cloud and an application running on the Cloud. The Cloud is just a platform to build an application on.
So, when you look at privacy, understand that there are many layers to privacy and security. Its more than just about Facebook changing their terms of service on a whim. Even then, they did change the terms back fairly quickly.
That's my $.02.