Who: Competition and Markets Authority (“CMA”)
Where: UK
When: 1 December 2015
Law stated as at: 9 January 2016
What happened:
The UK’s competition regulator, the CMA, has announced that it has launched a review of compliance in the cloud storage sector.
An estimated 40% of adults in the UK use cloud storage services, such as Apple’s iCloud and Google’s Drive, to store photographs, documents, music and other data. However the CMA has received complaints about various cloud providers, and so has decided to investigate the industry in order to find out more about whether practices used by cloud storage providers are in breach of UK consumer laws.
Cloud provider practices to be scrutinised
In particular, the CMA has been alerted to instances of:
- unexpected price increases after consumers have signed up to cloud services;
- ‘unlimited storage capacity deals’ being changed or capacity being reduced after contracts have been agreed;
- consumers’ data being lost, deleted or inaccessible; and
- cloud provider terms and conditions not achieving compliance with consumer law.Why this matters:
- The CMA has earmarked cloud computing as a specific sector of interest as part of its Strategic Assessment, and it will be interesting to see how the CMA responds following the review (the period of response to which ended on 15 January 2016). At this stage, the CMA has said that there are a range of possible outcomes following the review, including the initiation of consumer law enforcement action against non-compliant providers, seeking voluntary action from providers and/or guidance notes. Watch this space.
- Over 30 providers have been notified that they will be required to give evidence as part of the review. The review will assess how widespread these practices are, how they affect consumers and whether UK consumer laws are being breached.
Why this matters:
The CMA has earmarked cloud computing as a specific sector of interest as part of its Strategic Assessment, and it will be interesting to see how the CMA responds following the review (the period of response to which ended on 15 January 2016). At this stage, the CMA has said that there are a range of possible outcomes following the review, including the initiation of consumer law enforcement action against non-compliant providers, seeking voluntary action from providers and/or guidance notes. Watch this space.
