The European Commission has announced that it will provide some model standard terms and conditions when businesses use cloud service providers. It is concerned with the current take-it-or-leave-it type of contracts which are not desirable for their customers or ultimate consumers. Even large customers have little bargaining power and are compromised when it comes to liability for data integrity, confidentiality and continuation of service, including on termination. The Commission wants to change that by the end of 2014. It is also proposing to issue standard terms and conditions for the cross-border sale of goods where one party is either a consumer or an SME under the proposed new 28th contract law regime – a new EU-wide set of laws that will run as an alternative legal system to those of the current 27 Member States.
Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP, says: “This seems like another pie in the sky idea from the Commission that is out of touch with reality. It is all very well coming up with a new legal system or standard terms and conditions for the cloud, but unless businesses including cloud service providers want to use them, what is the point? The system is voluntary, and so far there has been little appetite in the UK for a 28th contract law regime. I suspect there will be even less keenness from cloud service providers to change something that already works for them. But this remains to be seen.”