‘Egress fees’ (i.e. data transfer fees charged by a cloud provider when users wish to leave it or use multicloud) have been a recurring topic within the cloud sector over the past few years. Many cloud players and competition authorities over the world have pointed out the anticompetitive nature of such fees. They are artificial, resulting from commercial strategies of the largest cloud service providers (hyperscalers) to lock customers.
The situation has resulted in legislators diving deeper into the matter and increasing pressure to make hyperscalers change their practices. The recent European Data Act is part of this. And this pressure has paid off. Google recently announced that it will stop charging fees to transfer data out of Google Cloud for some customers. But we believe that the cloud cloud users can obtain more.
Let’s be clear, this Google announcement is a good news. A very first step in the right direction for fairer competition within the cloud market and more freedom of choice for the user. Also, it suggests that data exit fees billed until then by Google were unjustified. These fees could have been withdrawn a long time ago…Better late than never.
However, Google’s announcement leaves some key aspects in the shadow.
The removal of data transfer fees should allow users to migrate easily on prem or towards their chosen cloud provider, including in a multi-cloud approach. This is the freedom that OVHcloud has defended from day one. That’s why any cloud provider communicating about the removal of data transfer fees with a willingness to effectively remove them should ensure that such removal:
- Applies to all the services offered by the cloud provider, and not only a small selection;
- Applies to all the clients of the cloud provider, regardless the data they have on the cloud;
- Doesn’t depend on the cloud provider’s approval;
- Is not billed at all (no offset with a credit note);
- Is automatic and does not create new obstacles or delay to migration;
- Covers multi-cloud moves and not only contract termination.
To make sure that Google’s announcement is not only a marketing ploy, its must be complemented with additional measures like the ones listed above. Regulators continued pressure will be key to ensure this first step will be followed by many others.
Egress fees are only part of the chains that impede users’ freedom. We must not lose sight of the objective to put an end to all the unfair practices that currently poison the cloud market: they lead to restrict users’ freedom of choice and to destroy competition, while consolidating the market around few providers. To restore fair competition, hyperscalers must:
- Stop all practices aimed at locking users, whether they are technical (interoperability and portability restrictions), commercial (overcommitted spend discounts) or legal (complex long term contracts with no exit clause);
- Not abuse their position in adjacent markets (e.g. software) to impose their cloud services to users, through tied selling or self-preferencing;
- Provide full transparency on price predictability and risks of access to data by third parties.
We believe the cloud should be a place of freedom, where users can choose the services best suited for their needs, and change them when such needs evolve. In that sense, we call on our ecosystem to continue the fight against anticompetitive practices and join in standing up for an open cloud, an interoperable, portable and reversible cloud model, guaranteeing user’s freedom of choice.
What do you think? #data #cloud #egressfees #dataact
Solange Viegas Dos Reis
Chief Legal Officer & Secretary of the Board of Directors