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UK competition watchdog to probe cloud storage sector for consumer law violations

The Competition and Markets Authority vows to investigate cloud storage market, following user complaints

Cloud storage firms that drastically increase their prices or renege on promises of unlimited capacity could find themselves in breach of consumer law, government competition chiefs have warned.

The Competition and Markets Authority (CMA) said it plans to review the way the cloud storage sector operates to ensure UK-based users are receiving a fair deal, following complaints about unexpected price increases, service closures and the surprise removal of unlimited storage offers.

At the start of November 2015, Microsoft announced it was calling time on its long-standing offer of unlimited storage for users of its OneDrive cloud service, after some were said to be abusing it by backing up huge quantities of data.   

The CMA is now calling on businesses that rely on cloud storage services to share their experiences, having already pinpointed some unspecified areas of concern in the terms and conditions offered by certain providers.

“We have identified some potential consumer protection issues that we would like to know more about,” the organisation stated in a review document.

“To understand how widespread these issues are, whether they breach consumer protection law and how they are affecting consumers, we have launched this consumer law compliance review.”

The CMA said it is keen to ascertain how these services are initially marketed to users to find out how much information is shared upfront about contract length, pricing and upload limits, for example.

It also wants to know how well providers communicate their terms and conditions to users, and any information about pricing changes.

The feedback garnered from the review will be used to decide whether or not the actions of the cloud storage community could be considered to violate portions of the Consumer Rights Act, as well as the Consumer Protection from Unfair Trading Regulations, the CMA added.

As well as users, the organisation is seeking views on this topic from consumer groups, academic researchers and cloud providers before its deadline of 15 January 2016.

Nisha Arora, senior director of consumer at CMA, said the cloud storage sector is a growing and dynamic place, and steps must be taken to ensure it is working well for consumers too.

“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,” she added.

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