QMUL Cloud Legal Project Cloud Legal Project: Began in Oct 2009 as 3 year project - funded by Microsoft. Focus? To address legal and regulatory issues.

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QMUL Cloud Legal Project

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Cloud Legal Project:

• Began in Oct 2009 as 3 year project - funded by Microsoft.

• Focus? To address legal and regulatory issues concerning cloud computing with a view to reducing uncertainty.

• Based at the Centre for Commercial Legal Studies at Queen Mary, University of London.

• Expertise in law and technology issues and intellectual property law.

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• To date, papers have been published on: - Standard Cloud T&Cs

- Negotiated Cloud Contracts

- UK G-Cloud

- Data Protection & Cloud

- Information Ownership & Cloud

- Competition Law & Cloud

- Law enforcement access & Cloud

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• In 2012, papers forthcoming on:

- Consumer Protection & Cloud

- Cloud Governance

• All research available at: http://www.cloudlegal.ccls.qmul.ac.uk/index.html

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Negotiated Cloud Contracts?

Our research was based upon:

• Informal discussions with cloud ‘actors’• Detailed confidential interviews with over 20 organisations of at least an hour each between Dec 2010 & early 2012, including: - Cloud providers (SaaS IaaS PaaS / UK & Global) - Cloud users (businesses & public sector) - Law firms and insurance companies.

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Negotiated Cloud Contracts - Main Conclusions?

• Standard contract terms reflect importance of the consumer distribution model in cloud provision

• Certain factors are forcing providers to become more flexible: - Trad. IT service vendors/companies willing to accept risk are entering market and offering enterprise grade services with matching contracts - Niche providers and integrators are emerging, more willing to tailor contract terms and service features - To remain competitive, flexibility and customer awareness are required

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Negotiated Cloud Contracts - Main Conclusions?

• Even large providers are realising they must adapt, thus offering a range of services with different pricing and terms

• Large users able to require contracts be drawn on their terms are considering producing standard SaaS and IaaS terms e.g. financial institutions

• May be scope for co-ordinated collective efforts in this regard

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Negotiated Cloud Contracts - Main Conclusions?

• Mid to low value markets?

- Choice and information are still limited; many contract terms are still inadequate or inappropriate for users needs.

- Limited bargaining power

• Hopefully there will be a filtering down of know-how to the mid market at least

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Negotiated Cloud Contracts - Main Conclusions?

• Low value market? Regulatory/Legislative action perhaps needed e.g. consumer protection law, data protection law

• Such actions need to reflect technological/logistical reality of cloud, so that action does not stifle benefits

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Negotiated Cloud Contracts - Main Conclusions?

• Encouragement of range of of available cloud services, with appropriate terms, may be the way to go. • Unfair of users to expect a tailored service on cheap, commoditised public cloud delivered on shared infrastructure

• Awareness and education re: cloud expectations helpful here

• Also, industry self regulation certification helpful

• Plus, more transparency/openness about ‘nature’ of cloud e.g. reality of ‘layering’ of service and data location.

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Cloud Computing & Consumer Contracts?

• Consumer protection law has a role to play in ensuring this culture of openness and transparency about the reality of use of the cloud and also regulating question of subsequent liability in consumer market.

• Consumer protection being both ex ante and ex post

• Also, again, industry self regulation has a role here e.g. Cloud Industry Forum in UK / Code of Practice.

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Cloud computing & Consumer Contracts?

Ex ante?

• Unfair Commercial Practices• Advertising Standards e.g. UK ASA• Distance Selling - as now subsumed with Consumer Rights Directive• E-commerce Directive• Consumer Rights Directive• Self Regulation. • Design?

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Cloud computing & Consumer Contracts?

Ex post?

• Laws regulating the sale of goods and service to consumers e.g.

- UK Sale of Goods and Services Act, 1982 which requires exercise of “reasonable care and skill” in delivery of services - Sale of Goods Act and implied terms - Unfair contract terms e.g. UCTA

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Cloud computing & Consumer Contracts?

Ex post?

• An important question in the context of ex post liability and implied terms is whether cloud computing is a good, service or sui generis?

• Important question regarding responsibilities for providers and rights for users

• Consumer Rights Directive - Recital 19. UK Implementation?

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Cloud computing & Consumers?

Other issues?

• Mixed use in the context of the Cloud - consumer or business? - look to initial purpose? (Consumer Rights Directive Recital 17 - UK Implementation?)

• “Free” services - same expectation as if a paying consumer?

• Using the cloud for the purpose of starting a business - consumer or business? - look to initial purpose?