The UK’s Competition and Markets Authority (CMA) has announced a review of compliance with consumer law in the cloud storage services sector. While the review is focused solely on establishing compliance with consumer law, it is being driven partly by the European Commissions’s strategy to build a “Digital Single Market” so may ultimately have wider implications for business cloud services.
In the UK, the review has been prompted by consumer concerns about price and service changes for cloud storage. Cloud storage is used by a growing number of UK consumers to store photographs, music and documents: an estimated 40% of UK adults use cloud storage services.
The CMA review of consumer law compliance in this important sector follows some reports of practices and terms being used that may breach consumer law. For example, the CMA reports it has heard about consumers being surprised by significant price increases and by reductions to unlimited storage capacity deals after contracts have been agreed. The CMA is also aware of concerns about the loss or deletion of some consumers’ data.
The CMA’s review will assess how widespread these practices are, whether they breach consumer law and how they are affecting consumers. The review is open for responses until 15 January 2016. The CMA wants to hear from businesses about their practices and from consumers and industry experts about their experiences.
Nisha Arora, CMA Senior Director, Consumer, said: “Cloud storage is a dynamic and growing sector which is already highly valued by consumers. “We want to hear from business, interested organisations and consumers about their experiences, to assess whether companies understand and comply with consumer law and whether cloud storage services are working well for consumers as a result.
“If our review finds breaches of consumer protection laws we will take further action to address these which could include enforcement action using our consumer law powers, seeking voluntary change from the sector or providing guidance to business or consumers.”
The CMA review may ultimately have implications for business because it is being driven in part by the European Commission’s strategy to build a ‘Digital Single Market. This builds on the previous European Cloud Computing Strategy, which was designed to speed up and increase the use of cloud computing across all economic sectors and included work on developing ‘safe and fair’ terms and conditions. The Digital Single Market strategy aims to develop legislative proposals for simple and effective cross-border contract rules for consumers and businesses.
The CMA report is expected to be published in May 2016.
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