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Government competition chiefs demand fairer use terms for cloud storage customers

LiveDrive, JustCloud and Dixons Carphone commit to fairer usage terms for cloud customers, but Microsoft and Google are conspicuous by their absence

Google and Microsoft are among the major cloud providers yet to commit to the government’s push for fairer terms and conditions for online storage customers.

The government-backed Competition and Markets Authority (CMA) is calling on cloud storage firms to commit to introducing fairer terms and conditions for customers. This is to prevent them being caught out by sudden price hikes, unexpected service terminations and unscrupulous auto-renewal tactics.

At the time of writing, online storage providers LiveDrive, JustCloud and Dixons Carphone had publicly committed to rolling out fairer terms of use for customers.

Computer Weekly contacted Google, whose Drive service offers users 15GB of free online storage, for clarification on its support for the CMA’s call for commitment, but had not received a response at the time of publication.

Microsoft, which offers users access to online storage via its OneDrive service, declined Computer Weekly’s request for comment.

The competition watchdog also published an open letter to the cloud storage community, urging them to review their terms, and demands that customers are given sufficient information before they sign up about what their rights are.

Otherwise, the letter warns, cloud storage firms could find themselves at risk of enforcement action from the CMA or Trading Standards for violating the Consumer Rights Act 2015.

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“If a term is not fair, it will not be legally binding on a consumer and you are at risk of enforcement action,” the letter states.

“Having clear and fair terms will save you time, help prevent disputes and reputational damage, and protect your business if something goes wrong.”

In a statement, the CMA said it is also in talks with a number of other cloud storage firms about tweaking their terms of use to ensure customers are getting a fairer deal.

A spokesperson for online file sync and share service Dropbox confirmed to Computer Weekly that it is supporting the CMA in its work, and prides itself of ensuring its terms and conditions are easy for users to follow and understand.

“We have been participating in the CMA’s industry wide review of cloud storage providers and their respective terms of service,” said the spokesperson.

“We have always taken care to draft terms in a manner that invites consumers to read and understand them — we try to write in plain and concise language that conveys a conversational tone.

“We look forward to continued engagement with the CMA and to helping address the concerns they have raised to the industry as a whole.” 

Enforce and reform

The CMA’s open letter is the result of a consultation, embarked on by the Competition and Markets Authority (CMA) in December 2015, which sought to verify if the business tactics of cloud storage providers could be considered in breach of consumer law.

The work  resulted in the publication of a 218-page report into the cloud storage sector’s compliance with consumer law, and sheds some light on why the CMA has moved to act on the way some firms operate in this market.

For example, a CMA poll of nearly 4,000 UK adults revealed that 27% of UK consumers use cloud storage, with the vast majority relying on free services to backup data and ensure it can be accessed across multiple devices and operating systems.

Nine out of 10 users (87%) have never experienced a problem with their chosen provider, the CMA report states, but certain “terms and practices” have come to light that have given the organisation cause for concern.

“If left unchecked, we are concerned these terms and practices have the potential to cause further harm to consumers in the future,” the report continued.

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