IT administrators at a public university and a large manufacturing company claim that Google Desktop's new search-across-computers feature could place sensitive data at risk, and violate federal data-privacy regulations. Both of the organisations have placed a ban on the software.

Any amount of time that data is stored on an outside server is too long for institutions that must comply with the Family Educational Rights and Privacy Act (FERPA) and the Health Insurance Portability and Accountability Act (HIPAA), which provide strict guidelines for protecting student and medical data, respectively, said Michael Holstein, security administrator at Cleveland State University.