CMA secures better cloud storage deals

BT, Dropbox, Google and Mozy have worked with the Competition and Markets Authority (CMA) to ensure that cloud storage users are made aware of changes to the service they are offered and can decide what to do in response. Each company has given commitments to make individual improvements to address concerns in one or more of the following areas:

• guaranteeing adequate notice is given before any significant adverse changes are made to the price, service or contract
• ensuring customers are given clearer information about how they can cancel if they don’t want to accept proposed changes, and when and how they can get refunds
• limiting the circumstances in which companies can suspend or cancel the service
• increasing transparency and giving notice before companies automatically renew fixed-term contracts

Nisha Arora, CMA Senior Director for Consumer Enforcement, said:

People increasingly rely on cloud storage as a safe and convenient place to keep family photos, music and important documents, so it is vital that they are treated fairly and are not hit by unexpected changes to price or storage levels.

We are pleased that these 4 companies have followed the 3 others which agreed commitments earlier this year to improve their terms and conditions, providing a better service for their customers. We want to ensure that companies treat their customers fairly and comply with consumer law; those that don’t, are at risk of enforcement action.

Cloud storage is a system for storing data such as music, films and photographs on remote servers. In a report published in May 2016, 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, in its initial review, the CMA also found some contract terms and practices which could breach consumer law.

Following that review, the CMA has been working with companies in the cloud storage sector to improve their terms and practices, and has secured improvements from 7 companies.

The CMA is still working with other companies in the cloud storage sector to improve compliance with consumer law and ensure a better service for users.

The CMA has also published an open letter to businesses advising them of their obligations, as well as a short video and a 60-second summary for consumers on choosing the right service.

In October the CMA launched a new campaign, consisting of simple videos and guides, to help businesses understand how to avoid including unfair terms and conditions in their contracts with consumers.