The world is embracing cloud computing, from consumers to the largest enterprises choosing to store data in centers provided by the large (Amazon, for example) to small. But are these providers giving you a fair deal? You might want to check after the British Competition and Markets Authority issued a report bashing companies for possibly breaching consumer law.

A UK analyst labels what providers are doing “malpractice.”

Several British-based firms have told the CMA that they are changing business practices in reaction to the report.

Consumers told the CMA that some cloud firms have “some contract terms and practices” that could be breaches of the law.

Problems include::

  • changing the service or terms of the contract at any time, for any reason and without notice
  • suspending or terminating the contract without notice for any reason
  • automatically renewing a contract at the end of a fixed term without giving notice or withdrawal rights

“Just malpractice”

“The ability of cloud providers being able to just terminate, at little or no notice, people’s contracts is, apart from a lack of sensitivity to customer service, a lack of recognition in the value and use of data storage,” said Mark Skilton, an information systems and business management professor at the Warwick Business School in London. “It is important that cloud providers recognize key new laws on digital contents rights in the Consumer Rights Act, as it requires them to recognize consumers’ right to access their data held by the cloud companies. 

“Unfair hidden charges may also be levied at the cloud providers plus changing charging rules with little notice. This is just malpractice that can occur in any industry and needs to be regulated for,” he added.

“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.”


Guide to cloud contracts

From the CMA:

Before you sign up to a cloud storage service

Think about what you want or need to use it for: as a back-up in case you lose the originals? Or as a way to share and access your files no matter where you are or what device you are using?
Do you want to save your data in tandem with other storage options so that it is in more than one place?
Think about how much data you want to store. Some services offer free storage and then tiered price plans give you more.

Important things to look out for once you’ve signed up

  • Look out for notices from the storage provider about auto renewal dates or any changes to the service or price – check your e-mails (including in the spam/trash).
  • Remember you have the right to cancel and get a refund within 14 days of signing up to a service and every time it renews.
  • Check for any restrictions on use. If your account is suspended or cancelled you could lose access to data.
  • Keep payment details up to date to avoid subscription lapses that could stop you accessing your data.
  • Remember to sign in occasionally – some providers close inactive accounts.
  • If you want to leave the service, check how much notice you need to give. Make sure you have enough time to transfer or back up your data to another location.

What to do if things go wrong

You can challenge a contract term if you think it is unfair, even if you have signed up to it “in the contract”.
An unfair term isn’t legally binding – check our advice for businesses to find out more.

Businesses offering cloud storage services need to comply with consumer law.


Read more at:

https://www.gov.uk/government/consultations/cloud-storage-consumer-law-compliance-review