Cloud storage providers could be breaching the Consumer Rights’ Act

The Competition and Markets Authority (CMA) is to launch an investigation into whether cloud storage users are paying the right amount for their data storage service amidst concerns that cloud providers are hiking prices and are locking customers into pricey contracts.

The issue has arisen at a time when cloud storage is becoming ever more popular with consumers and businesses. The Office for National Statistics has estimated that 40 percent of UK adults now use cloud storage. Consumers often chose to store their photos and music on the cloud whilst businesses frequently depend on cloud application services, including as Software as a Service (SaaS) and Platform as a Service (PaaS).

Over the past few years companies have begun to pass up external hard drives in favor of the cloud. The cloud facilitates work remotely by enabling employees to access data on the go.

Most leading cloud storage providers give their customers a certain amount of storage space for free, after which they charge prices which rarely exceed £40 a month. Some businesses and consumers have started to complain about these fees, stating that cloud providers have been unexpectedly increasing their monthly prices. In a recent customer survey Secure Data MGT found that 63 percent of IT managers feel they are provided inadequate cloud storage space for their needs.

The CMA is encouraging businesses and consumers with complaints about their cloud provider to come forward. It may be ruled that the actions of cloud storage providers are in violation of the Consumers Rights' Act. The Act was passed only in October this year. It gives consumers longer periods in which they could refund purchases. The act also protects consumers who shop online. For instance, if a customer makes a digital film purchase but is unable to play it they can get a substitute under this new legislation.

The CMA has said it is also looking into what happens to consumers' information once they have stopped using a cloud storage service, amid security concerns. It will investigate how this information is destroyed and if it is destroyed securely. The CMA will try to determine how transparent cloud providers are and whether their users are being given sufficient information before beginning contracts.

Cloud storage providers have in the past given false assurances to consumers. The pledge to provide unlimited storage to customers is frequently recanted by nervous cloud vendors. Providers often offer unlimited storage to customers without actually considering how much storage space businesses and individuals now require. Vendors quickly begin to realize that the cost of providing customers unlimited storage is simply not sustainable. This has been the case with smaller companies, such as Mozy and Hive.

Even tech giants have had to back-track on their unlimited storage commitments. Just over a year ago Microsoft announced that it would provide unlimited storage, otherwise known as its' OneDrive service, to those signed up to its Office 365 Home and Personal program. Last month Microsoft put an end to this deal, stating that some customers were using up too much of their supposedly 'unlimited storage'. The amount of storage available has been capped to 1TB. Some customers complained that even before Microsoft announced these changes they had found their storage space was being reduced.

When it comes to data storage, consumers and businesses are becoming more equipped at identifying loopholes. The Consumer Act has emboldened consumers who have felt misguided by their cloud storage providers and has encouraged them put forward their complaints. Increasingly, cloud users are able to understand exactly what they want from their provider; with data security, sufficient storage space and fair costing all ranking high in their list of priorities.

Cloud providers that do not live up to customers' expectations and adequately fulfill their priorities should expect a swift reprisal. They cannot hide behind tech jargon any longer.

Photo Credit: bahri altay/Shutterstock

Secure Data MGT are UK specialists in offsite information backup for physical records and digital media.