What is cloud computing?
"Cloud computing” means accessing computer capacity and programming facilities online or "in the cloud". Customers are spared the expense of purchasing, installing and maintaining hardware and software locally.
Customers can easily expand or reduce IT capacity according to their needs. This essentially transforms computing into an on-demand utility. An added boon is that data can be accessed and processed from anywhere via the internet.
When purchased as a service, cloud computing is highly cost effective as it is based on pay-per-use. It has the potential to slash user IT expenditure and optimise use of digital technologies throughout the economy. Making full use of the cloud could deliver 2.5 million extra jobs in Europe and add around 1% a year to EU GDP by 2020.
How can contracts promote cloud computing?
Unfortunately, consumers and companies are often reluctant to take advantage of cloud computing services either because contracts are unclear or are unbalanced in favour of service providers. Existing regulations and national contract laws may not always be adapted to cloud-based services. Protection of personal data in a cloud environment also needs to be addressed. Adapting contract law is therefore an important part of the Commission’s cloud computing strategy.
Safe and fair contracts for cloud computing
The Commission is working towards cloud computing contracts that contain safe and fair terms and conditions for all parties. On 18 June 2013, the Commission set up a group of experts to define safe and fair conditions and identify best practices for cloud computing contracts. The Commission also performed studies on cloud computing contracts to explore these issues.
Follow-up
In theDigital Single Market Strategy for Europe, adopted on 6 May 2015, the Commission announced the launch of a European Cloud Initiative, including cloud services certification, contracts and switching of cloud services providers. The Commission acknowledged the role of cloud contracts, notably in relation to data portability, as "contracts often exclude, or severely limit the contractual liability of the cloud provider if the data is no longer available or is unusable, or they make it difficult to terminate the contract".
In April 2016 the Commission gave a new impetus to its work on cloud computing by adopting the Communication on "European Cloud Initiative - Building a competitive data and knowledge economy in Europe", where it announced that "[the] European Cloud Initiative will be complemented by further action under the Digital Single Market Strategy covering cloud contracts for business users and switching of cloud services providers".
Read more
"Unleashing the potential of cloud computing in Europe (pdf)".
This Commission communication of 27 September 2012 outlines a strategy to promote the use of cloud computing across the economy. The strategy comprises three key actions. Key action 2 concerns the identification of safe and fair contract terms and conditions for cloud computing contracts.