UK regulator extracts fairer cloud-storage terms from Dropbox

On 4 November 2016 the UK Competition and Markets Authority (CMA) announced that it had concluded a review of the consumer cloud-storage sector, securing voluntary undertakings from providers including BT, Dropbox, Google, and Mozy — named directly in the CMA's release — alongside other providers such as JustCloud and Livedrive, as part of commitments the regulator said covered seven companies in total. The undertakings were designed to bring providers' contract terms and practices into line with UK consumer-protection law.

The CMA's undertakings addressed four specific practices. Providers committed to "guaranteeing adequate notice is given before any significant adverse changes are made to the price, service or contract"; to "ensuring customers are given clearer information about how they can cancel if they don't want to accept proposed changes, and when and how they can get refunds"; to "limiting the circumstances in which companies can suspend or cancel the service"; and to "increasing transparency and giving notice before companies automatically renew fixed-term contracts."

Nisha Arora, the CMA's Senior Director for Consumer Enforcement, said: "People increasingly rely on cloud storage as a safe and convenient place to keep family photos, music and important documents, so it is vital that they are treated fairly and are not hit by unexpected changes to price or storage levels." The CMA's release also noted that approximately three in ten British adults personally use cloud storage. The CMA framed the outcome as securing 'better deals' for cloud-storage customers; it was a consumer-protection intervention rather than a competition (antitrust) enforcement action, and no penalty was imposed on Dropbox.

Dropbox's participation was as one of several named providers that gave undertakings; the changes were intended to benefit UK consumers using its storage service.