It seems that Germans take their privacy seriously. Or at least seriously enough that the German state of Hesse has  declared that it's illegal for its primary schools to use Microsoft Office 365, the cloud-based version of the company's popular productivity software. 

According to the Hessian Commissioner for Data Protection and Freedom of Information ( HBDI)--which, let's be honest, is quite the title--Office 365 doesn't offer the level of control that would satisfy privacy regulations for schools (note: that link is in German). 

That also seems to be true of Apple and Google as well, meaning that schools can't use iCloud or Google Docs either. 

Hesse has a population of a little over six million people, with a school-age population of far less, meaning that this isn't going to break the bank for any of these companies, but it definitely represents a real concern. 

Here's why:

It seems that since the cloud-based software collects personal information and telemetry data related to users, and that information is stored on company servers, the concern is that U.S. authorities might compel access to that information. 

Or, said another way, the HBDI would very much like for companies to keep information about its citizens on servers within its borders. That isn't something Microsoft or any of the companies involved seem overly interested in.

The HBDI has said that it would like to work with Microsoft, but what that really means is that it wants Microsoft to make dramatic changes to the way it handles data generated from its cloud-based services.

Microsoft, for its part, responded via a spokesperson saying that "we routinely work to address customer concerns by clarifying our policies and data protection practices, and we look forward to working with the Hessian Commissioner to better understand their concerns. When Office 365 is connected to a work or school account, administrators have a range of options to limit features that are enabled by sending data to Microsoft."

Look, I don't know much about German regulatory particulars, but I do know that governments are increasingly concerned about the privacy practices of tech companies. That's true not just in Germany or in Europe, but right here in the United States, too.

Google, Facebook, Amazon, and even Apple have faced increased scrutiny from regulators and even the Justice Department over the way they handle customer data and personal information, as well as their anti-competitive practices.

But governments aren't always concerned about the best interests of their citizens. Often, they're interested in protecting your privacy only until it affects their ability to access your information. 

Still, there's a lesson for both companies and users. The problem these companies face is trust. Clearly, the Hessian authorities don't trust Microsoft or Apple or Google. They don't trust that those companies would refuse to turn over information about their citizens to U.S. authorities. Likewise, they don't trust that the companies would comply with requests to turn over information about people within their borders. 

This isn't a new problem. Technology companies have been dealing with trust issues for a while, and this is just the latest example. Those issues have arisen over time as companies make decisions that compromise user privacy and data security in favor of business models that monetize our most personal asset--our identities.

The irony is that Microsoft has remained largely unscathed by the most recent privacy-related scandals, and has long been regarded as a reliable enterprise-class secure software provider. And Apple has established a reputation for standing up for privacy even in the face of pressure from law enforcement. The company makes a point of saying that it can't access its users' data even if it wants to, due to end-to-end encryption.

The bad news is that as both users and governments have lost trust in an entire industry, there have been real consequences even for those who seem to be playing by the rules. 

As an entrepreneur, it's worth recognizing that as you build your business, trust is by far your most valuable brand asset, and it's not one you can buy. It's something that you build with every interaction with your customers, and it's something you can lose every time you forget the responsibility you have to engage transparently and with care for what matters most.