Data and document privacy concerns are increasingly important in the online world. In Cloud Computing, the story is the same, as the secure processing of personal data represents a huge challenge The main focus is to to preserve and protect personally identifiable information (PII) of individuals, customers, businesses, governments and organisations. The current use of anonymization techniques is not quite efficient because of its failure to use the structure of the datasets under consideration and inability to use a metric that balances the usefulness of information with privacy preservation. In this work, an adaptive lossy decomposition algorithm was developed for preserving privacy in cloud computing. The algorithm uses the foreign key associations to determine the generalizations possible for any attribute in the database. It generates penalties for each obscured attribute when sharing and proposes an optimal decomposition of the relation. Postgraduate database of Federal University of Agriculture, Abeokuta, Nigeria and Adult database provided at the UCIrvine Machine Learning Repository were used for the evaluation. The result shows a system that could be used to improve privacy in cloud computing.