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Three UK cloudy firms promise CMA they'll be 'fairer' to customers
Market probe by regulator results in publicly slapped wrists
The Competitions and Markets Authority (CMA) has found cloud storage providers were using contract terms and practices which could have breached consumer protection law – and has secured a “commitment” from three companies to not be naughty.
Following the CMA's 218-page consumer law review of the sector (PDF), and “engagement” with the CMA during the course of the review, a number of cloud storage providers have “given commitments to provide fairer terms for their cloud storage customers.”
This follows a series of stories on The Register regarding the readily changing T&Cs of cloud storage companies, and our reporting on the ransomware infection of PC World's backup services.
Dixons Carphone, JustCloud, and Livedrive were found to “have some contract terms and practices which could be in breach of consumer law,” the CMA said, “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.”
Livedrive's recent price hikes caused waves, as we reported, with reseller Monster Cloud recently passing on those hikes and amended subscription plans to customers. This resulted in an exceptionally beautiful email exchange, part of which follows:
From: Reg Reader, To: Monster Cloud
As forced by your outrageous price increase I have closed the account.
I expect a 75%+ refund of the fee I paid you as it was active for less than 3 months.
I hope this part of the process is less opaque than your other business dealings.
From: Monster Cloud, To: Reg Reader
I'm sorry, did you want our help or did you think this was somewhere you could just be abusive?
The CMA has also published an open letter to cloud storage providers (PDF) pointing out the review and reminding them that both itself and the Trading Standards Services “have the power to take enforcement action against a business where there is evidence that it is using potentially unfair terms” and that consumers “can challenge unfair terms in court”.
Nish Arora, the CMA's “senior director of consumer”, said: “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.” added Arora.
Dixons Carphone, JustCloud, and Livedrive had not responded to The Register's enquiries at the time of publication. We'll update if we hear more. ®