This study focuses on the impact of Cloud-Based Shadow IT on data privacy in the tech sector of Sweden. It explores the use of unapproved applications by employees without the knowledge and control of the IT department. The objective is to understand how Cloud-Based Shadow IT affects employees' compliance with cloud services and to examine the understanding of IT managers regarding this phenomenon. The research problem addresses the challenges faced in ensuring compliance with regulations and effective utilization of cloud technology. By identifying the strengths, weaknesses, possibilities, and risks associated with Cloud-Based Shadow IT, this study aimed to provide insights for companies and IT managers in making informed decisions. It explores the relationship between Shadow IT and cloud services and investigates employees' and IT managers' adherence to and understanding of these issues.    The findings indicate that employees have varying levels of understanding, with limited knowledge of approved cloud services. Managers prioritize security concerns, including data compliance and ownership, but lack strategies to address knowledge gaps. The use of Cloud-Based Shadow IT has both positive and negative consequences, including increased productivity and collaboration but also data loss and non-compliance risks. Factors such as education and awareness of security risks are important for employees to understand and comply with policies. Overall, the study highlights the need for continuous education and awareness programs to improve understanding and decision-making regarding cloud services and Shadow IT.