Vendor lock-in is a well-known problem in SaaS or software partnerships. To avoid potential vendor lock-in effects complex clauses are often included in software agreements to ensure a seamless transition or migration to another provider. In practice, such clauses cannot always overcome technical or commercial obstacles for the customer when switching is necessary, such as data egress, high costs and a lack of interoperability.
The EU Data Act introduces a set of minimum contractual standards for the switching process in which the customers should be able to switch seamlessly from one provider to another, without losing any data or the functionality of applications. PaaS and SaaS service providers will be obligated to make open interfaces available and export data in a commonly used and machine-readable form. IaaS service providers must take measures to facilitate that the customer gets materially comparable outcomes in response to the same input for features that both services share (functional equivalence).
Providers shall need to include clauses in the customer agreements such as a mandatory maximum transition period, a minimum period for data retrieval, assistance obligations, details on the data and application for export and the obligation to maintain a high level of security.
As vendor lock-in often occurs because of the high additional costs related to the switching, the Data Act aims to limit those costs for the customer. From 12 January 2027, switching charges will be removed. However, during the first 3 years after the Data Act’s entry into force (11 January 2024 to 12 January 2027) providers shall still be able to charge their customers for costs related to switching and data egress.
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