Business users associations update ‘11 Fair Principles for a balanced cloud market’

In 2022, Beltug and sister CIO associations Cigref (France), CIO Platform (Netherlands) and VOICE (Germany) published our first call for a balanced cloud market. In the meantime, the European Commission has published the outcomes of its B2B Data Sharing and Cloud Computing expert group in the ‘Draft Recommendation on non-binding model contractual terms on data access and use and non-binding standard contractual clauses for cloud computing contracts’. It sets out updated rights and responsibilities to promote fairer, more transparent practices, as well as creating opportunities for innovation.

Now, we have updated our comprehensive Paper on 11 Fair Principles to unleash the digital potential of Europe.

What’s new in the paper?

The Paper has been updated to include information on the impact of recent legislation, including the Data Act, Digital Markets Act (DMA), AI Act, US Cloud Act, etc., as well as the increased use of Artificial Intelligence (AI) in cloud solutions and the impact of the current geopolitical situation.

Why do unfair practices arise?

The revised paper lays out the characteristics of the cloud market that contribute to unfair practices, including:

• Vendor lock-in is created by the complex and costly conditions for switching providers.
• Business users do not have bargaining power vis-à-vis the large software suppliers.
• Cloud providers can unilaterally change subscription prices and the metrics on which the prices are based, making it difficult for customers to predict future costs.
• Market concentration and dominance by a couple of large players creates imbalance, but niche plyers can also have a dominant position vis-à-vis their customers, due to the dependence of the customer on the software or cloud service provided.
• The market tendency to combine vertical offerings enables software providers to limit the choice of infrastructure that business customers are entitled to use to run their cloud applications.
• The costs and complexity for the business user to get their data back from the provider at the end of the contract can be very unreasonable.

What are the ‘11 Fair Principles’?

1. The vendor shall fulfil existing regulatory obligations.
2. Vendors must not create a technical or commercial lock-in.
3. Customer shall remain in control of their own data and all the data uploaded or processed by the service/solution.
4. Contractual terms and conditions shall be clear, unambiguous and not unilaterally changeable.
5. Contractual terms shall not restrict or discriminate against the customer’s choice of cloud provider, outsourcing partner or hardware platform.
6. Contractual terms for licensing and subscriptions shall be free from geographic and entity restrictions.
7. Contractual terms shall allow customers to use progressive or innovative technologies and deployment models.
8. Service levels and product specifications shall be explicitly listed and take into account the customer’s context.
9. Commercial models shall not be changed unilaterally and shall adhere to an active ‘opt-in’ principle.
10. Commercial models and offerings shall be consistent and reasonable, not combining different models for the benefit of the vendor’s revenue.
11. The scope, execution and intended outcome of an audit shall be clearly defined in the contract.