EU cloud computing contracts to go under the microscope

An expert group will try to define a single standard contract

The way in which European cloud computing contracts are drawn up is to come under scrutiny by a team of experts.

On Friday the European Commission, the European Union's top law-making body, called for nominations for people from industry, academia and other interested groups to sit on the new expert group, which is being formed in order to create a transparent and comprehensible contract model.

According to Digital Agenda Commissioner Neelie Kroes, users often don't understand the terms of their contract, what they're paying for and what they can expect. She said that people shouldn't need a law degree to know what they are signing up to.

"Small firms might hesitate to use the cloud because of fears that they will not meet their legal obligations, or worries that they might get locked in, Kroes said on her personal blog. "They don't want the risk of getting mired in foreign court cases in foreign languages; nor of exposing the data which may be their business's life blood to security risks or breaches. And they cannot afford costly legal fees to figure all this out case by case."

The creation of model contract terms was one of the four key goals of the Commission's cloud computing strategy announced last September. The other targets include defining technical standards; a certification plan for service providers; and raising cloud adoption in public sector.

The Commission wants to establish "safe and fair" contract terms including service level agreements. It believes that many current, off-the-shelf contracts save costs for the provider but are often undesirable for the user, including the final consumer.

The new expert group will look specifically at personal data protection aspects relevant for cloud computing contracts and will come up with a model that can work for everyone.

"Contract law is an important part of our cloud computing strategy," said Justice Commissioner Viviane Reding. "Making full use of the cloud could deliver 2.5 million extra jobs in Europe, and add around 1 percent a year to E.U. GDP by 2020. Uncertainty around cloud computing contracts may hinder cross-border trade," she said.

This issues will be discussed at the next meeting of the European Cloud Partnership Steering Board in Tallinn, Estonia, on July 4.

Follow Jennifer on Twitter at @BrusselsGeek or email tips and comments to jennifer_baker@idg.com.

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Jennifer Baker

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