MSE News

Cloud storage review launched amid price hikes and data loss concerns

Paloma Kubiak

Editor

1 December 2015

The competition watchdog has today launched a review into the cloud storage sector – where data such as photos, music and documents are stored virtually – following concerns over practices that may potentially breach consumer law.

Cloud storage is increasingly popular, with 40% of UK adults using it, according to the Office for National Statistics. But today's move by the Competition and Markets Authority (CMA) follows problems it's been made aware of including:

Unexpected price increases after contracts have been agreed.
Unlimited storage capacity deals changed or reduced significantly after contracts have been agreed.
The loss or deletion of data, and not being able to access data.

Nisha Arora, Competition and Markets Authority senior director of consumer, says: "If our review finds breaches of consumer protection laws we will take further action to address these, which could include enforcement action using our consumer law powers, seeking voluntary change from the sector or providing guidance to business or consumers."

The CMA expects to publish a summary of its findings in May 2016. See MoneySavingExpert.com's Free Online Storage guide for help on how to store data online for free.

What exactly will the review look at?

The regulator wants to hear from users about how cloud storage services are advertised, such as the price, length of contract and level of service, whether there are any limits on uploading and downloading data, and what's covered in terms of security of the data.

It also wants to know how customers buy services, such as through websites or mobile phones, and it also hopes to hear from businesses providing cloud storage on why prices and services may change once a contract's signed, whether at the end of a contract it automatically renews, and whether customers need to pay any fees or charges when they cancel. Similarly, it wants to know if companies offer refunds or compensation if a contract's cancelled.

The review won't however cover services or applications that enable users to upload and share photos on social networks, nor will it include online or cloud-based email accounts. See the CMA website for full details of the review and how and when to submit a response.