Suppose the police come to your door with a warrant authorizing them to search your hard drive for certain data. What if your drive is located not in your home but in the cloud? What if, further, your cloud vendor’s server is located in a foreign country whose laws don’t recognize the authority of your local police department’s search warrant?

Can you refuse to give up the data on these grounds? Or, on the contrary, can data, like people accused of serious crimes, be extradited to a foreign jurisdiction?

These are some of the intriguing issues raised by a recent and rather odd incident in Korea. It seems that Google has been under antitrust investigation by Korea’s Fair Trade Commission. When the Commission recently raided Google’s Seoul office seeking certain documents, the U.S. search giant is alleged to have turned off its Internet connection and then claimed it couldn’t access the documents because they were stored in the cloud. Google is also said to have argued it didn’t have to turn over the documents anyway, because the cloud servers in question were located in another country.

Now, I don’t know if these charges against Google hold water or not. And, being of a libertarian bent, I don’t condone Korea’s protectionist practice of promoting its own national search engines over foreign competitors.

But let’s put the specifics of this case aside and focus on the underlying issue. Can the owner of a file or chunk of data use the laws of one country to justify withholding that data from the authorities of another country? If so, what are the implications for cloud computing?

There is no easy answer to this question. On the one hand, it is surely a good thing if dissidents living in dictatorships can leverage U.S.-based cloud services to circumvent local censorship. The powerful role of Twitter in the last year’s popular rebellion in Egypt is a shining example of power of the cloud in this regard. (Unfortunately, it seems that Twitter and more recently Google have caved in to pressure from the dictatorships to allow censorship.)

On the other hand, it would be highly undesirable if scofflaw corporations and private individuals were allowed to use the cloud’s ambiguous relationship to national geographies as an excuse to evade legitimate investigative requests from local authorities.

The inevitable result would be the complete Balkanization of cloud computing’s infrastructure, as each country and legal jurisdiction demanded that all cloud data pertaining to its citizens be located within its physical borders.

Notice that this issue is usually framed the other way around. Cloud users in the U.S. and Europe often worry that if a cloud vendor stores their data overseas, the data will then become vulnerable to search by foreign governments.

For example, this past December a big UK defense contractor reportedly cancelled a planned deployment of Microsoft’s Office 365 cloud suite because the U.S. vendor couldn’t guarantee that the customer’s data would stay in Europe (where it would presumably be safe from prying U.S. government eyes).

A recent article by former Homeland Security Secretary Michael Chertoff published on looks at the issues raised by such cases in some detail.

One striking example cited by Secretary Chertoff concerns the European-based SWIFT banking transaction network. When European authorities learned that the U.S. Treasury was accessing SWIFT data to track terrorist financial dealings, they demanded that the practice end on the grounds that it violated European data privacy rules.

Secretary Chertoff goes on to argue that while the risk of having cloud data fall under the control of a foreign power may be “tolerable and manageable for a private company, it is less tolerable and manageable for federal, state, and local governments.”

The reality is that there is no universal solution to the problems posed in these examples. The issues can probably only be dealt with on a case-by-case basis.

In the case of Google’s “the cloud ate my data” episode in Korea, the root cause seems to have been a certain reckless disregard for the rules by management, rather than a deliberate plan to challenge the geopolitical foundations of cloud computing.

But the dilemma remains: how can we protect the safety and security of data in the cloud – especially data owned by U.S. State, Local and Federal government entities – without provoking a collapse of the cloud back into the narrow confines of national borders? I predict this question will be with us for some time to come.

Jeff Gould is CEO, Peerstone Research.

Photo caption: Visitors sit on a bench at a lobby of an office of Google Korea in Seoul on August 11, 2010. South Korean police on August 10, searched the offices of Google Korea to investigate whether it breached privacy law in collecting information for its Street View service.

(Photo credit:PARK JI-HWAN/AFP/Getty Images)