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UK government concerned, will probe cloud storage industry

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Staff writer ▼ | December 2, 2015
Probes into the cloud storage industry, price comparison websites and local government authorities will all be launched by the UK competition watchdog in coming few months, with the support of Chancellor George Osborne.
Cloud storage industry
Privacy and safety   An investigation has already begun into cloud storage
An investigation has already begun into cloud storage, the Competition and Markets Authority said, after consumers raised concerns about prices and service changes that may breach consumer law.

With around 40% of UK adults using cloud storage for backing up their photographs, music and other documents, the CMA had become concerned by reports about significant price increases and by reductions to 'unlimited storage' deals, together with some complaints about the loss or deletion of data.

"Cloud storage is a dynamic and growing sector which is already highly valued by consumers," said CMA director Nisha Arora, who called for business, interested organisations and consumers to report their experiences of the sector.

It was also confirmed by the Treasury that the CMA will undertake an analysis of price comparison websites during 2016 as it was felt consumers and small businesses "do not always trust them" and they are seen by the government as a key enabler of competition in sectors such as energy and other utilities.

The CMA wants to ensure these site "are meeting their full potential in allowing consumers to compare and switch products".

After finding several issues in the sector as part of a 2014 investigation into motor insurance comparison sites, the CMA wonders whether some improvements cannot be made, including subjecting certain PCWs in specific sectors to more rigorous propriety and transparency standards and possibly calling for the creation of a common accreditation framework.

The Treasury paper presented by the Chancellor also called for tariff data to be more readily-available to help new and innovative price comparison websites, "using legislation if necessary", so that "consumers across the regulated sectors have easy access to the data they need to find the best deals for them".

Osborne's "better deal" plan, which is subtitled "boosting competition to bring down bills for families and firms", also said the CMA will probe local authorities, including those cities with newly devolved powers, to see how they can support competition "and challenge them when they do not".

Due to report in 2017, the CMA investigation will consider whether "the relationship between local authorities and competition are enabling steps that can be taken to support local authorities in promoting competitive local markets".