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Cloud storage customers to get fairer deal

Cloud storage users are set to benefit from fairer terms and conditions after action by the Competition and Markets Authority.

The Competition and Markets Authority (CMA) has published its consumer law review of the sector forcing cloud storage providers to provide fairer terms for their customers. Some providers have already announced fairer terms and the CMA is working with a number of others to make their terms and practices fairer.

The CMA has found that around three in ten British adults use cloud storage in a personal capacity. Many small businesses also use cloud storage solutions aimed at consumers to store their data.

While many services are free and users are generally satisfied with their services, the review found that some businesses have contract terms and practices that could be in breach of consumer law, including those giving companies the ability to:

  • Change the service or terms of the contract at any time, for any reason and without notice;
  • Suspend or terminate the contract without notice for any reason;
  • Automatically renew a contract at the end of a fixed term without giving notice or withdrawal rights.

In addition, the CMA is publishing an open letter for businesses that advises them to review their terms to make sure they are fair for consumers and ensure that consumers get necessary information before they buy.

Nisha Arora, CMA Senior Director, Consumer, said:

"In this rapidly-developing market, it's important that we act now to ensure that businesses comply with the law and that consumers' trust in these valuable services is maintained. We welcome the fact that a number of companies have already agreed to change their terms and expect to see improvements from other companies."

Commenting on the review, Professor Mark Skilton of Warwick Business School said: 

"The ability of cloud providers … to just terminate, at little or no notice, people's contracts is a lack of recognition in the value and use of data storage. Just 'pulling the plug' on a customer's contract and so denying them access to their data is in violation of the principles of consumer rights and deserves the CMA's response."

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