In Amazon S3 you can now select the location where the data is stored. This is currently "USA" or "Europe". Latency is the issue, but the downside is price:
We charge less where our costs are less, thus some prices vary across geographic regions and are based on the location of the bucket.
The differences are: $0.15(US)/$0.18(EU) per GB-Month of storage used, $0.01(US)/$0.012(EU) per 1,000 PUT or LIST requests, $0.01(US)/$0.012(EU) per 10,000 GET and all other requests. EC2->S3(US) bandwidth is free and EC2->S3(EU) will be charged at regular rates.
I've been looking at hosting recently and it is amazing how many UK/European datacenters are out of space and/or power and how much price per Mbps varies. I assume Amazon is just passing on the costs, but then I also expect them to be operating at a scale where this shouldn't really affect them, hmmm.
I suspect it's not so much the latency that's the issue, it's the fact that if you're in Europe and you move your customer data outside of Europe (and therefore outside of a region where data processing laws apply) then you've got certain legal hoops and responsibilities that you have to address (like asking the user if you can do this first.)
