CMA Investigation into cloud pricing for consumers

What?

The Competition and Markets Authority (CMA) have launched an investigation looking at whether internet users are being charged unfairly in relation to their use of services in the cloud.

So what?

The CMA has stated some cloud providers may be breaching consumer laws, following a number of complaints about the transparency of pricing and the detail of the service being procured being changed. In particular, the CMA states concerns around:

  • certain suppliers practice of increasing prices unexpectedly after the contract has been formed. In relation to 1, clearly, suppliers have to comply with fairly strict laws on price transparent as a result of the new Consumer Rights Act which came into force in October
  • the ability for cloud providers to change data storage levels;
  • data of the user being lost or deleted;
  • automatic contract renewal at the end of the term; and
  • clarity and detail of what happens at the end of a contract.

Nisha Arora, CMA's consumer senior director comments: "If our review finds breaches of consumer protection laws, we will take further action to address these. The type of action the CMA has in its powers includes asking for voluntary changes, providing guidance to either the suppliers and/or the consumers and using enforcement powers.

The CMA's consultation is open for comments until 15 January 2016. The initial findings and report are expected around May.

The investigation gives cloud suppliers an opportunity to comment and influence the findings. Additionally, cloud suppliers are advised to check they are content their online cloud provision for consumers are fully compliant. Moreover, it will be important to consider the impact of any findings and guidance when it comes out next year.