UK Competition and Markets Authority to launch legal probe into cloud storage
The UK’s Competitions and Markets Authority (CMA) is to launch a review of how the cloud storage sector may be affected by consumer law, in the wake of rising concerns about pricing and services charges.
With an estimated 40% of consumers now using cloud storage to store music, images and documents, according to the CMA, compliance with consumer law is increasingly critical. The CMA says that it is taking action as reports emerge of possible breaches of consumer law through rogue practices and terms.
In one case consumers were hit with surprise price increases and reductions to their ‘unlimited’ storage capacity deals after contracts had been agreed. The CMA is also concerned about incidents of loss and deletion of some consumers’ data.
The CMA’s review is to investigate how widespread these practices are, whether they breach consumer law and how they are affecting consumers. The process, which begins on December 1st, is open for responses until 15 January 2016. The CMA says it wants to hear from businesses about their practices and from consumers and industry experts about their experiences.
“We want to assess whether companies understand and comply with consumer law and whether cloud storage services are working well for consumers as a result,” said Nisha Arora, CMA Senior Director.
If the review finds breaches of consumer protection laws it will take action to address these, it says. This could include enforcement action using the CMA’s own consumer law powers, namely Part 2 of the Consumer Rights Act 2015 relating to unfair terms and for contracts entered into before 1 October 2015 the Unfair Terms in Consumer Contracts Regulations 1999. It can also invoke the Consumer Protection from Unfair Trading Regulations 2008 (CPRs). Alternatively, it may seek voluntary change from the sector or provide guidance to business or consumers.
The CMA has a general review function under section 5 of the Enterprise Act 2002. Information gathered can help the CMA to determine whether further action is warranted. However the CMA says it has not taken any decisions about what it might do once this review is completed.