The term data sovereignty in cloud computing refers to the concept that digital data is subject to the laws and governance structures of the country in which it is stored. This legal jurisdiction can impact factors like data privacy, security, and compliance with regulations. As data flows across borders, businesses must be aware of differing regulations and potential legal ramifications regarding data accessibility and controls. Failing to comply with local laws can lead to significant legal penalties and risks, making data sovereignty a crucial consideration for companies operating on a global scale.