Cloud Contracts Criticized by U.K. Regulator Over Price, Service
(Bloomberg) — Cloud computing service providers were criticized by a U.K. regulator for using contracts that allow them to hike prices and terminate services without notice.
Three providers of cloud services, Dixons Carphone Plc, JustCloud and Livedrive, agreed to improve their terms, the Competition and Markets Authority said Friday in a statement. Several other companies will have to make similar changes, the watchdog said, without identifying them.
While people find cloud services useful, the CMA “also heard some complaints resulting from unfair terms in contracts,” Nisha Arora, the authority’s senior director for consumer issues, said in the statement. “If left unchanged, these terms could result in people losing access to their treasured possessions or facing unexpected charges.”
Cloud storage offers a convenient means of safely storing family photos, music, films and important documents, and access them from any device, the CMA said. About three in 10 people in the U.K. use such services, mostly for free, from their smartphones and tablets, the regulator said. This is true for the likes of Google’s Drive or Apple Inc.’s iCloud, said Cecilia Parker Aranha, project director at the Competition Markets Authority.
The three providers that have agreed to change their contract terms today weren’t necessarily the worst offenders, but were of particular concern to the CMA because they offer standalone cloud services storage products for which they charge consumers for any level of storage, Parker Aranha said.
In a fast developing market “it’s important that we act now to ensure that businesses comply with the law and that consumers’ trust in these valuable services is maintained,” Arora said.