Business

Cloud storage providers to face investigation by regulators

diagram of cloud storage Image copyright Thinkstock

An investigation is to be launched into whether internet users are being charged unfairly when they use cloud storage services.

The Competition and Markets Authority (CMA) said some providers may be breaching consumer laws.

It will look into complaints that prices can go up after a customer has taken out a contract - or that the amount of data storage can be changed.

Earlier this year the ONS reported that 40% of UK adults now use cloud storage.

Users of lap-tops, mobiles and tablets are increasingly taking advantage of such services, to store photos, documents, TV programmes and films.

By storing such files in the cloud, rather than on the device itself, users get more memory, and the ability to access them from anywhere in the world.

Usually cloud storage providers offer a certain amount of memory for free, but can charge up to £40 a month for extra gigabytes.

Amongst the biggest providers are Dropbox, Google Drive and Apple's iCloud.

Image copyright Thinkstock

'Enforcement'

The CMA said it was particularly concerned about:

  • Unexpected price increases, after a contract has been taken out
  • Changes or reductions to unlimited storage capacity deals
  • Consumers' data being lost or deleted
  • How contracts are automatically renewed at the end of the period
  • What happens to consumers' data when they cancel a contract

"If our review finds breaches of consumer protection laws, we will take further action to address these," said Nisha Arora, the CMA's senior director for consumer.

That could include "enforcement action using our consumer law powers, seeking voluntary change from the sector, or providing guidance to business or consumers."

The law on price transparency has been tightened since the Consumer Rights Act came into force on 1 October.

The CMA's consultation on the issue will be open until 15 January 2016, with an initial report on its findings expected in May.

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