Yes. Several German laws may require the cloud service provider to disclose data to the German authorities (e.g., the police and tax authorities).
Whether and to what extent the cloud service provider is subject to German law needs to be assessed on a case-by-case basis. However, to the extent that the cloud service provider holds data in Germany, it is — at least in theory — subject to German jurisdiction (i.e., the German authorities are physically able to access the relevant data). However, under German law, any kind of access to data by the German authorities is subject to strict requirements and the principle of proportionality.
The most relevant scenarios for disclosure under German law are as follows:
1. Criminal law
Under German criminal law, the following authorities could have access to data: law enforcement authorities, including the police (the Federal Police, the federal states' police and the Federal Criminal Police Office ("BKA")), public prosecutors, courts and the customs administration (including customs investigation offices); the Federal Intelligence Service; the Federal Office for the Protection of the Constitution and federal states' authorities for the protection of the constitution; and the Military Counterintelligence Service ("MAD").
Applicable scenarios include criminal investigations (including, in certain specific instances, the prevention of crime), tax/customs investigation and anti-terrorism.
2. National security/anti-terrorism laws
Under German national security/anti-terrorism laws, the following authorities could have access to data: the police (including the Federal Border Guard), the BKA, the Federal Office for the Protection of the Constitution, federal states' authorities for the protection of the constitution, the MAD and the Federal Intelligence Service.
Applicable scenarios are criminal investigations, anti-terrorism and military matters.
3. Tax/customs law
Under German tax/customs law, the following authorities could have access to data: the tax and customs administration, fiscal courts, courts, public prosecutors and tax and customs investigation offices.
Applicable scenarios include data access and intercept requests in connection with tax assessments and/or a customs declaration/assessment procedure, and criminal investigations in tax and/or customs matters.
4. Banking regulatory law
Under the German Banking Act (Kreditwesengesetz ("KWG")), the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht ("BaFin")) may access data.
However, this only applies where the financial institution is subject to the KWG. In such cases, it is required to store certain information on accounts and account holders, and it must grant BaFin access to the respective database (irrespective of whether the database is kept in-house or with a third-party service provider). In addition, by appropriate technical and organizational measures, it must ensure that the subject does not become aware of the fact that the BaFin is accessing the database (Section 24c of the KWG). Relevant scenarios include where access to data is required to comply with the BaFin's obligations under the KWG or the Act on the Detection of Proceeds of Serious Crime. The BaFin is entitled to share information with foreign courts and/or regulators if certain additional requirements are met.
Moreover, the BaFin has practically unlimited rights to demand information from banks, financial services providers, investment firms, payment and e-money institutions, alternative investment fund managers, UCITS managers and insurance undertakings regulated by it; further, to ask for the submission of documents and to make copies on all matters of business; and to inspect the premises and ask questions of personnel. In the case of banks, the BaFin does not need to have any discrete reason for its information and audit requests. The outsourcing of data should not impair these rights. In this regard, the outsourcing agreement must ensure that the BaFin can exercise these rights vis-à-vis cloud service providers, including on-site audits and the right to inspect documents and make copies.