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Italian Competition Agency Investigates Major Cloud Computing Service Providers for Allegedly Unfair T&Cs

The Italian Competition Authority (AGCM) has recently launched investigations against global leading providers of cloud computing services. AGCM is concerned that the service providers’ terms & conditions violate Italian consumers’ protection rules.

In particular, AGCM alleges that the investigated providers are engaging in unfair business practices consisting of:

  • improper collection of user data for commercial purposes;
  • undue influence on consumers, whose consent to the collection and use of their personal data for commercial purposes is required in order to use the cloud storage service; and
  • failure to clearly provide consumers with information on their right to withdraw from the contract and/or to access alternative dispute resolution mechanisms.

AGCM also alleges that some of the clauses contained in the general terms & conditions of these leading providers of cloud computing services are unfair.

Specifically, according to AGCM, allegedly unfair terms include the following:

  • the provider’s right to unilaterally modify contractual conditions, without notice or right to terminate or switch provider;
  • the provider’s right to suspend and interrupt the services, without minimum contract term;
  • the provider’s exemption or limitation of liability for security breaches, even in cases of damages or loss of documents stored on the user’s cloud space; and
  • the prevalence of the English version of the terms & conditions over the Italian version.

AGCM alleges that these types of clauses may be presumed to be in violation of the Italian Consumer Code, as they cause a significant imbalance in consumer’s rights and obligations and they appear to be drafted in a way that is unclear for the average consumer.

Interestingly, this approach seems to echo enhanced sector-specific consumer-protection provisions contained in the new EU Electronic Communications Code, to be transposed into national law across the EU by December 2020.

While the outcome of these investigations remains to be seen, they mark a growing enforcement trend not only in Italy, but also in other jurisdictions, to protect consumers and to address perceived risk of “market tipping” in favour of global digital platforms. 

© Copyright 2020 Squire Patton Boggs (US) LLPNational Law Review, Volume X, Number 260

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About this Author

Francesco Liberatore Competition Attorney Squire Patton Boggs London, UK & Brussels, Belgium & Milan, Italy
Partner

Francesco Liberatore advises clients on all aspects of the application of competition law, in particular in technology driven and digital economy sectors. His experience also focusses on communications law and he coordinates the firm’s EMEA Communications Practice.

He regularly represents clients in investigations before regulatory and competition authorities, as well as managing internal investigations, dawn raids and counseling on compliance issues and various commercial agreements. Francesco handles merger control due diligence and filings, as well as coordinating...

44 207-655-1505
Marco Malesci Corporate Attorney Squire Patton Boggs Milan, Italy
Associate

Marco Malesci is an associate in the Corporate Practice Group in the Milan office. He advises domestic and international clients on corporate and commercial law matters, with a particular focus on cross-border mergers and acquisitions, divestitures, joint ventures, corporate governance and general corporate counselling.

In particular, Marco has significant experience representing companies and private equity funds operating in the oil and gas, logistic, banking, manufacturing, real estate, renewable energy and healthcare sectors. He also counsels state-owned entities engaged in commercial transactions.

39 02-1241-27704