Competition and Markets authority (CMA) To Investigate Cloud Providers Alphabet Inc (GOOGL) And Apple Inc. (AAPL)


Even as cloud computing service providers are expanding their presence or offering, the sector has got the attention of the Competition and Markets Authority (CMA) in the Great Britain. The regulator has geared itself to launching an investigation on Alphabet Inc (NASDAQ:GOOGL) and Apple Inc. (NASDAQ:AAPL) for unfair charges using their cloud storage services. Currently, it is not clear whether any other cloud service providers are included in the investigation list of the CMA. The sector is beginning to open up, and the regulator’s move should smoothen the working of the cloud service providers for the benefit of the users.

Breaching Consumer Laws

Currently, Alphabet Inc (NASDAQ:GOOGL)’s Google Drive and Apple Inc. (NASDAQ:AAPL)’s iCloud apart from Dropbox were the largest cloud service providers. The CMA indicated that it has received information that some cloud service providers might be breaching consumer laws. Therefore, the regulator wanted to look into the complaints in respect of the prices that could increase after a contract has been signed by a customer. Alternatively, the service providers were blamed for changing the amount of data storage after the signing of the contract by the customers.

The reports indicated that that 40% of the adults in the United Kingdom were now using the cloud storage. That is primarily because of the advantage in storing documents or photos or films or any TV programs. The strong growth of smartphones, as well as, tablets or the increasing usage of these devices, has also contributed to the growth of the adults using the cloud services. Another advantage that the users get was the memory. Apart from the advantage of accessing these files or documents from anywhere in the globe, the user could get additional memory by freeing up some files or folders into the cloud computing.

Users Provided With Minimum Memory

Alphabet Inc (NASDAQ:GOOGL)’s Google Drive and Apple Inc. (NASDAQ:AAPL)’s iCloud were also offering some amount of memory free of cost. Like any other cloud service provider, these two companies also charge once the user exceeds the limit. However, the investigation in respect of the complaints was in regard to changing the agreed price or the storage level. In the Great Britain, users were charged about Pounds Sterling 40 for a month for extra gigabytes.

The regulator said that it was more worried about the unexpected increase in price once a contract was taken apart from reducing or changing the unlimited storage capacity agreements. There are also complaints that consumers’ data were being either deleted or lost. The regulator will likely go into the contracts and the way it was renewed automatically at the end of the contract period. Its Senior Director, Nisha Arora, said that if its review found any violation of consumer protection laws, it would not mind in taking action to address the issue. That included Alphabet Inc (NASDAQ:GOOGL)’s Google Drive and Apple Inc. (NASDAQ:AAPL)’s iCloud.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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