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Eversheds comment: Recognition of unfair terms from cloud providers should lead to improvements

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  • United Kingdom


    On news that the UK’s Competition and Markets Authority (CMA) claims some cloud computing providers may be breaching consumer laws by changing storage terms at any time, for any reason and without notice, Matthew Gough, partner and head of consumer law at Eversheds, comments:

    “The ability in a contract to change the terms at any time without reason, and the practice of automatically renewing contracts, are both highly likely to be unfair under the UK’s consumer law regime. Unfair terms are not enforceable against consumers in the event of a dispute, and the CMA has the ability to take enforcement action against businesses that use unfair terms with consumers. It is interesting that the market is recognising these failings, which may lead to improvements so consumers get a fair deal and the businesses are competing on a level playing field.

    “Eversheds’ own research into business use of cloud computing found that contract terms are a contentious area for business users too, with a significant number of cloud sales deals breaking down at the contract negotiation stage. More than a quarter of businesses surveyed (27%) walked away late in the negotiation process, while a further 10% had come close to abandoning the deal. Almost two thirds (60%) of customers who have walked away from a deal cite the inability to reach agreement on terms and conditions as the reason, with data protection provision being the most contentious area.

    “That said, we recognise that there are a number of cloud suppliers who work hard to have legally compliant terms, so the findings above can create a negative perception that unfairly taints the good suppliers who make every effort to comply and treat their customers fairly.”


    This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.

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