News

Amazon, Microsoft Clean Up Their Cloud Storage Contracts

In response to pressure from a U.K. competition watchdog, Amazon.com, Microsoft and Apple this month announced that they will revise their consumer cloud storage contracts to give their users better transparency.

The Competition and Markets Authority (CMA) is an independent consumer advocacy group in the United Kingdom that investigates violations of consumer fairness laws and anti-competitive practices. Last year, the group conducted a review of cloud storage vendors and found that common practices and terms used in cloud services contracts put customers at a disadvantage, particularly terms that let vendors change their prices and services without giving customers enough notice or a chance to cancel their agreements.

Other terms that the CMA deemed suspect are those that let vendors reduce their liability regarding lost, stolen or compromised data; or terms that allow them to automatically renew customers' contracts without giving them a window for cancellation.

Such practices "could breach consumer protection law," the CMA said last year in an open letter to cloud storage providers. "If you are a cloud storage business that deals with consumers, you must ensure that your contract terms are fair and that they comply with consumer protection law."

Since the CMA review, cloud storage providers including Dropbox, Google and Mozy have stated that they would amend their contract terms to focus on consumer fairness and clarity. This month, Amazon.com, Microsoft and Apple joined them, issuing separate statements last Friday outlining their planned changes for U.K. customers. For its part, Amazon.com said it will change the terms and conditions of its Drive cloud storage service to:

  • ensure that material changes to the service can only be made for valid reasons clearly set out in the contract terms;
  • ensure consumers receive reasonable advance notice of material changes to the service;
  • enable consumers who do not wish to accept material changes to the service to cancel the contract and obtain a refund for services not yet provided;
  • ensure that any increase in price does not take effect during a consumer's fixed contract term;
  • clearly and narrowly define the circumstances in which Amazon may suspend or terminate the contract or service;
  • ensure that, where appropriate, consumers are given notice of suspension or termination of the service or deletion of files and an opportunity to challenge the decision;
  • ensure that, in the event of a breach of contract by Amazon, consumers can terminate the contract and obtain a refund for services not yet provided;
  • ensure that Amazon's liability will not be excluded or limited if it fails to provide the service with reasonable skill and care; and
  • ensure that consumers receive at least 30 days' notice before their contract is renewed, including details of changes to the price or service.

Microsoft and Apple promised to add similar provisions to their OneDrive and iCloud service contracts, respectively. Microsoft specifically said it would give OneDrive customers at least 30 days' warning before making major changes to their accounts, including changes related to pricing, data storage limits, or service terminations due to user inactivity.

"We are pleased that Amazon, Apple and Microsoft have joined 7 previous companies in working with the CMA and agreeing commitments to improve their terms and conditions and, as a result, millions of cloud storage users will benefit from fairer terms which will help them make the right choices when using cloud storage services," said Andrea Coscelli, CMA acting chief executive, in a statement last Friday.

About the Author

Gladys Rama is the senior site producer for Redmondmag.com, RCPmag.com and MCPmag.com.

Featured