About Data Center & Digital Infrastructure Law
Data center and digital infrastructure law covers the legal framework that governs the operation, construction, and management of data centers, cloud facilities, and related networks. This includes commercial contracts, real estate and permitting, interconnection agreements with utilities, and energy efficiency mandates. It also encompasses privacy, security, breach notification, and cross-border data transfer requirements that apply to data stored in these facilities.
Practically, practitioners in this field help clients draft and negotiate leases, power and interconnection agreements, data processing agreements, and service level agreements. They also advise on regulatory compliance, risk management, and incident response planning for cyber and physical security events. The field increasingly intersects with environmental requirements and zoning, due to the footprint and energy use of data centers.
Data centers account for approximately 2 percent of electricity usage in the United States, according to the U.S. Department of Energy.
This figure highlights the regulatory focus on energy efficiency and reliability in data center operations.
Why You May Need a Lawyer
A data center project involves high-value contracts and complex compliance obligations. A qualified attorney helps prevent disputes and protect your assets from day one. Below are concrete scenarios where legal counsel is essential.
-
Lease and power supply negotiations. You are negotiating a large colocation or hyperscale facility lease. A lawyer can structure critical terms, allocate responsibility for cooling and uptime, and manage risk tied to termination or exit clauses. This is especially important for long-term, multi-year commitments and capex planning.
-
Interconnection and utility agreements. Interconnection with grids and utilities often requires detailed, technically specific contracts. An attorney helps align timelines, outage windows, and cost recovery for transmission and metering, while ensuring compliance with applicable rules.
-
Privacy, security, and data breach compliance. If you store personal data or protected health information, counsel can map duties under HIPAA, CPRA/CCPA, and state breach laws. A lawyer can draft data processing agreements and incident response plans that satisfy regulators and customers.
-
Zoning, permitting, and environmental compliance. Data centers require precise zoning approvals and building permits. A lawyer helps navigate local planning boards, environmental reviews, and energy-related permitting to avoid project delays.
-
Contracting with vendors and service providers. Data center operators rely on vendors for power, cooling, security, and software. A lawyer can draft and negotiate robust vendor contracts with clear service levels and liability allocations.
-
Cross-border data transfers and compliance. If data moves between jurisdictions, counsel can help implement lawful transfer mechanisms and address regional privacy regimes to reduce risk of fines or disruption.
Local Laws Overview
Energy Policy Act of 2005 (EPAct 2005)
EPAct 2005 establishes energy efficiency standards that affect federal data center procurement and efficiency programs. It created incentives and guidelines for reducing energy use in data centers and improving plug-load management. The act remains a baseline reference for federal facilities and informs state and industry best practices.
Effective date: August 8, 2005. Regulatory guidance and implementing programs have evolved through subsequent DOE and industry initiatives.
Key point for data centers: Many facilities use EPAct benchmarks and DOE guidance to structure energy performance projects and audits. For more information, see the U.S. Department of Energy guidance on data center efficiency.
Data center energy efficiency programs continue to be advanced through interagency and industry collaboration under EPAct framework.
New York Stop Hacks and Improve Electronic Data Security Act (SHIELD Act)
The SHIELD Act expands the scope of required data security measures for entities handling New York residents’ data. It emphasizes reasonable safeguards for data processing and security programs and expands breach notification obligations to affected individuals and certain state authorities. The act affects data centers operating or storing data for New York residents.
Effective date: Enacted in 2019; breach notification requirements began in 2020. The act has ongoing compliance implications for data processors and vendors in New York.
For official information about SHIELD Act requirements and enforcement, see New York Department of Financial Services and New York state resources.
California Consumer Privacy Act (CCPA) and California Privacy Rights Act (CPRA)
The CCPA governs how personal information may be collected, stored, sold, and shared by businesses. CPRA, enacted later, expands these rights and establishes additional privacy obligations. Data centers handling California residents' data must align operations, privacy notices, and data subject rights management with these laws. Enforcement is handled by the California Attorney General and, since CPRA, a dedicated privacy agency for some aspects.
Effective dates: CCPA took effect 1 January 2020; CPRA became effective 1 January 2023, with phased enforcement and rulemaking continuing thereafter.
Where applicable, data center operators must implement data processing agreements and data security measures compliant with CPRA and related regulations.
Frequently Asked Questions
What is a data center lease agreement and why should I consult a lawyer?
A data center lease governs space, power, and service terms between a tenant and a facility operator. A lawyer reviews escalation clauses, cure periods, and uptime commitments to protect your operations and budget. They also help with risk allocation for outages and escalations.
How do data center interconnection agreements affect latency and cost?
Interconnection agreements define how traffic routes to and from carriers and cloud services. A lawyer ensures performance targets, cost allocation, and outage remedies align with your business needs. Negotiating terms up front saves time and reduces disputes later.
When did CPRA changes take effect for storing customer data?
CPRA became operative on January 1, 2023, adding new privacy rights and obligations. Data centers processing California residents must adapt to these requirements in data handling, notices, and data subject access requests. Ongoing compliance remains essential.
Where can I find the governing privacy and security obligations for data centers?
Key sources include CPRA, CCPA, HIPAA for healthcare data, and sector-specific regulations. Your lawyer can map controls to regulatory requirements and draft appropriate contracts. Look to official state and federal resources for current rules.
Why might a data center need a disaster recovery plan reviewed by counsel?
A disaster recovery plan aligns with contractual uptime obligations and regulatory expectations. Legal review helps ensure your plan covers notification, data integrity, and vendor responsibilities. It also clarifies liability in the event of an outage.
Can I transfer data to another jurisdiction and stay compliant?
Cross-border transfers require lawful mechanisms and jurisdiction-specific privacy safeguards. A lawyer can design data transfer agreements and data protection addenda to reduce risk. They can also advise on residency and localization requirements where applicable.
Should I hire a local lawyer or a national firm for data center matters?
Local lawyers understand state and municipal permitting and zoning processes. National or international firms may handle multi-jurisdictional compliance and complex vendor contracts. Consider a team that combines both perspectives for best results.
Do I need to perform a data breach notification under NY SHIELD Act?
Most breaches affecting New York residents require timely notification to affected individuals and regulators. The exact timeline varies by the breach and affected data. A lawyer helps implement a compliant incident response workflow.
Is there a standard contract term for energy efficiency incentives?
Energy incentive terms vary by program and utility. A lawyer can tailor contracts to reflect incentive metrics, measurement and verification, and carryover rights. This helps ensure you receive eligible benefits without delays.
How long does it typically take to negotiate a data center lease?
Typical timelines range from 30 to 120 days, depending on complexity and permitting. A lawyer accelerates review by coordinating with lenders, operators, and brokers. Expect longer timelines for multi-building or multi-tenant arrangements.
What is the role of NIST guidelines in data center security?
NIST guidelines provide standards for security controls, risk management, and incident response. They are frequently referenced in contracts and compliance programs, though not all are mandatory. Counsel helps translate guidelines into enforceable obligations.
Do service providers have to sign a Data Processing Agreement?
Yes for many regulated data categories, especially where personal data is involved. A DPA sets data handling, security, and breach notification obligations. A lawyer ensures DPAs align with CPRA, HIPAA, and other applicable laws.
Additional Resources
-
U.S. Department of Energy - Data Center Energy Efficiency Program - Official guidance and case studies on reducing data center energy use and improving efficiency. energy.gov
-
U.S. Department of Health and Human Services - HIPAA - Privacy and security rules governing protection of health information hosted in data centers. hhs.gov
-
California Attorney General - CPRA and privacy enforcement - Official resources on the California privacy regime and data handling requirements. oag.ca.gov
Next Steps
Clarify your project scope and data footprint. Define workloads, data types, and locations to determine regulatory obligations. Create a one-page summary of your data center goals and timelines.
Identify applicable laws and jurisdictions. Map federal, state, and local rules that affect your facility, contracts, and data handling. Gather relevant statutes and guidance to discuss with counsel.
Prepare a short list of candidate lawyers or firms. Look for experience with data center leases, interconnection agreements, and privacy compliance. Request sample engagement letters and references.
Schedule consultations and request engagement proposals. Use a standardized questionnaire to compare scope, fees, and timelines. Ask about prior data center projects and outcomes.
Review engagement letters and fee structures. Ensure clear scope, deliverables, and dispute resolution terms. Confirm whether rates are fixed or hourly and what out-of-pocket costs apply.
Approve a plan and commence work. Sign an engagement letter and set milestones for contract drafting, compliance mapping, and risk assessment. Establish regular check-ins and reporting.
Launch the project with a compliance baseline. Implement a risk register, data handling policies, and incident response procedures. Schedule periodic reviews to reflect regulatory changes.
A Lawzana ajuda-o a encontrar os melhores advogados e escritórios através de uma lista selecionada e pré-verificada de profissionais jurídicos qualificados. A nossa plataforma oferece rankings e perfis detalhados de advogados e escritórios, permitindo comparar por áreas de prática, incluindo Centro de Dados e Infraestrutura Digital, experiência e feedback de clientes.
Cada perfil inclui uma descrição das áreas de prática do escritório, avaliações de clientes, membros da equipa e sócios, ano de fundação, idiomas falados, localizações, informações de contacto, presença nas redes sociais e artigos ou recursos publicados. A maioria dos escritórios na nossa plataforma fala português e tem experiência em questões jurídicas locais e internacionais.
Obtenha um orçamento dos melhores escritórios — de forma rápida, segura e sem complicações desnecessárias.
Aviso Legal:
As informações fornecidas nesta página são apenas para fins informativos gerais e não constituem aconselhamento jurídico. Embora nos esforcemos para garantir a precisão e relevância do conteúdo, as informações jurídicas podem mudar ao longo do tempo, e as interpretações da lei podem variar. Deve sempre consultar um profissional jurídico qualificado para aconselhamento específico à sua situação.
Renunciamos a qualquer responsabilidade por ações tomadas ou não tomadas com base no conteúdo desta página. Se acredita que alguma informação está incorreta ou desatualizada, por favor contact us, e iremos rever e atualizar conforme apropriado.
