Cloud computing for the German market: A rough line legal comparison

18 April 2013

Alexander Duisberg

Cloud Computing raises many questions as to the contractual requirements under German law. The issues around licensing usage rights, warranties and liability, data protection and exit management are core to any cloud services, be it IaaS, PaaS, SaaS, Process as a Service or any other cloud offering.

How do some of the large providers handle these issues? 

Do they meet the expectations of German statutory law? 

Are B2B users reasonably well protected?

Numerous providers have opted to use terms subject to foreign law, leaving behind the stringent judicial control of German courts on standard terms and conditions (t&c and t&c law). The downside of this approach is, however, a significantly lower degree of B2B user acceptance (which is by far not limited to the SME segment).

Our rough line analysis shows that Cloud providers are struggling to meet proper expectations against the background of German law, and those who are contracting under German law keep a considerable number of important, but unenforceable provisions in their T&C. 

For more information click here to access the report.