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From: Competition and Markets Authority
First published: 4 November 2016
Part of: Consumer protection

Cloud storage users can expect fairer deals from 4 companies which are improving their terms and conditions, following action taken by the CMA.

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 AroraCMA 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.

Notes for editors

  1. The CMA is the UK’s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law. For more information on the CMA see our homepage or follow us on Twitter @CMAgovukFlickr and LinkedIn. Sign up to our email alerts to receive updates on consumer enforcement cases.
  2. The CMA has not made a finding on whether cloud storage providers’ terms and practices have breached consumer law. The CMA has not opened a formal investigation into any cloud storage provider on whether their practices could breach consumer law. Where there is evidence that practices breach consumer law this could lead to enforcement action by the CMA or other enforcers. Only a court can decide whether a particular term or practice breaches the law.
  3. A summary of the changes to be made by British Telecommunications Plc (BT), Dropbox Inc and Dropbox Ireland (Dropbox), Google Inc (Google) and Mozy International Limited (Mozy) has been published on the case page.
  4. The key pieces of consumer protection legislation relevant to this review and enforced by the CMA are: 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), and the Consumer Protection from Unfair Trading Regulations 2008.
  5. The CMA commissioned Ipsos MORI to carry out a consumer survey. This survey was carried out by Ipsos MORI between 7 and 29 January 2016 as part of its face-to-face omnibus survey, Capibus, which conducts interviews with 2,000 GB adults aged 15+ every week. It asked consumers who used cloud storage in a personal/private capacity a range of questions about their experience of cloud storage.
  6. Individuals have rights under the Consumer Rights Act and can ask a court to consider whether a term is unfair and unenforceable. The Citizens Advice consumer helpline is a telephone, email and online service offering advice to consumers where they have a problem with goods and services in the UK. If you have a cross-border complaint, you can go to www.econsumer.gov. The UK European Consumer Centre provides advice if you have a dispute with a trader in another EU country.
  7. Enquiries should be directed to Simon Belgard (simon.belgard@cma.gsi.gov.uk, 020 3738 6472).

Source: Competition and Markets Authority

 

 

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