Consumers to get a fairer cloud storage deal

Cloud storage is a system for storing data such as music, films and photographs on remote servers. The CMA found that around 3 in 10 British adults use cloud storage in a personal capacity. The majority currently benefit from free services that come with their devices such as smartphones and tablets and consumers are generally satisfied with their services.

However, it also heard some concerns and found that businesses have some contract terms and practices which could be in breach of consumer law, including those giving companies the ability to:

• Change the service or terms of the contract at any time, for any reason and without notice;
• Suspend or terminate the contract without notice for any reason; and
• Automatically renew a contract at the end of a fixed term without giving notice or withdrawal rights.

The CMA welcomes the commitments to changing these terms and practices made by Dixons Carphone, JustCloud and Livedrive. The CMA is talking to other companies in the sector and expects them to make similar improvements. Companies which do not comply with consumer law risk enforcement action.

In addition to its report, the CMA has also published an open letter for businesses, which advises them to:

• Review their terms to make sure they are fair for consumers; and
• Ensure that consumers get necessary information before they buy.

Nisha Arora, Senior Director, Consumer, CMA, commented: "Cloud storage offers a convenient means of keeping family photos, favourite music and films and important documents safe and accessing them quickly from any device.

"Our review found that people find these services really valuable. However, we also heard some complaints resulting from unfair terms in contracts. If left unchanged, these terms could result in people losing access to their treasured possessions or facing unexpected charges.

"In this rapidly-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. We welcome the fact that a number of companies have already agreed to change their terms and expect to see improvements from other companies."