Cloud storage sector probed by UK competition watchdog

CMA investigating consumer complaints over price and service changes in fast-growing sector

The UK competition watchdog has launched a review of the cloud storage sector amid concerns that consumers are being short-changed on price and capacity once they've signed a contract.

The Competition and Markets Authority (CMA) this morning announced it will gather industry feedback on the issue over the next six weeks following complaints that backup providers are hiking prices or reneging on ‘unlimited' capacity deals after deals have been signed.

The CMA estimated that 40 per cent of UK adults now use cloud storage services to store photographs, music and documents.

It's not the first time the sector has been in hot water from the authorities, with the Advertising Standards Agency upholding a complaint against backup outfit Carbonite in 2012 for dubious claims over its "unlimited" backup service.

On top of the worries around price and service changes, the CMA said it is also aware of concerns about the loss or deletion of some consumers' data.

The review, which is open for responses until 15 January 2016, will assess how widespread these practices are and whether they breach consumer law.

Nisha Arora, CMA senior director, Consumer, said: "Cloud storage is a dynamic and growing sector which is already highly valued by consumers.

"We want to hear from business, interested organisations and consumers about their experiences, to assess whether companies understand and comply with consumer law and whether cloud storage services are working well for consumers as a result."

She added: "If our review finds breaches of consumer protection laws we will take further action to address these, which could include enforcement action using our consumer law powers, seeking voluntary change from the sector or providing guidance to business or consumers."