Experts sought to work on developing standard cloud computing contract terms

Last September the Commission announced that it would draw up new model contract terms for cloud computing as part of a wider strategy entitled 'Unleashing the Potential of Cloud Computing in Europe'. http://www.out-law.com/en/articles/2012/september/commission-seeks-model-contract-terms-and-new-standards-for-cloud-computing-services/ Now it is calling on experts to apply to help define the new terms to address concerns businesses have about cloud contracts being unclear or weighted in favour of providers.

"Contract Law is an important part of our cloud computing strategy," the EU's Justice Commissioner Viviane Reding said in a statement. "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. Uncertainty around cloud computing contracts may hinder cross-border trade. As this is a very complex area, we are asking experts for advice before we decide on the next steps."

The Commission said that the experts will be drawn from cloud providers, consumers, small businesses, academia and the legal profession. It said it could also set up a future expert group to "work on personal data protection aspects relevant to cloud computing contracts".

At the launch of its cloud computing strategy last year the Commission said that the development of "safe and fair contract terms and conditions" could help improve the trust that businesses have in cloud providers.

"The complexity and uncertainty of the legal framework for cloud services providers means that they often use complex contracts or service level agreements with extensive disclaimers," the Commission said in its strategy. "The use of 'take-it-or-leave-it' standard contracts might be cost-saving for the provider but is often undesirable for the user, including the final consumer. Such contracts may also impose the choice of applicable law or inhibit data recovery."

"Even larger companies have little negotiation power and contracts often do not provide for liability for data integrity, confidentiality or service continuity," it said. "As regards professional users, the development of the model terms for cloud computing of the service level agreements for professional users were one of the most important issues that arose during the consultation process. The service level agreements determine the relationship between the cloud provider and professional users, and thus essentially provide the basis of trust cloud users can have in a cloud provider's ability to deliver services."