Law: Who controls your cloud data?

This is an interesting situation, and one that I think does need to be addressed in an international forum.   When dealing with data "in the cloud", who controls it?  Does it depend on the country of citizenship of the content owner?  Does it depend on the home country of the service being used?  Or does it depend on the physical location of the server?

Naked Security:  Microsoft: US would be outraged if another nation ransacked its servers