Ask any IT manager what happens if their main cloud provider raises prices by twenty percent tomorrow, and the answer is usually an uncomfortable silence. Not because there is no alternative, but because the cost and lead time of switching have never been calculated. That is precisely where the European legislator is now intervening.
What the Data Act arranges, and when
The EU Data Act (Regulation 2023/2854) has applied since 12 September 2025. For cloud services it contains a switching chapter that works in two stages. In the interim phase, running from 11 January 2024 to 12 January 2027, providers may only charge reduced switching charges, which may not exceed the costs the provider actually incurs and that are directly linked to the switching process. From 12 January 2027 that room disappears entirely: providers may impose no switching charges at all. Providers must also disclose standard service fees, early termination penalties and any reduced switching charges before the contract is concluded.
This is a misunderstanding we meet often: egress fees have not been abolished yet. There are still more than five months to go — and contracts signed today will run on into a different regime.
Why voluntary remedies did not work
The cloud market is heavily concentrated. According to Synergy Research Group, AWS, Microsoft and Google together held 63% of the cloud infrastructure market in the third quarter of 2025: 29%, 20% and 13% respectively. In a market with those ratios, switching barriers are unlikely to resolve themselves.
The UK Competition and Markets Authority concluded its cloud market investigation in July 2025 and found adverse effects on competition, centred on egress fees, committed spend agreements and switching barriers. More telling still is its finding on the free-switching programmes the three large providers launched in early 2024: a sixty-day window, mandatory advance application, no coverage of ongoing multi-cloud use and, at two providers, a 100 gigabyte minimum. The CMA found low uptake relative to the size of these providers' customer bases. Voluntary remedies did not work — which is exactly why legislation followed.
Exit is now a compliance requirement too
For financial institutions, exit has not been a good intention but an obligation since January 2025. DORA requires entities to identify and assess all relevant risks before contracting, including the possibility that the arrangement reinforces ICT concentration risk. They must maintain a register of information covering all contractual arrangements for ICT services, and must be able to exit contracts without disruption to business activities, without limiting regulatory compliance and without detriment to service continuity for clients. Exit plans must be comprehensive, documented, sufficiently tested and periodically reviewed.
Outside the financial sector the norm is shifting too. In its revised central government cloud policy of 3 July 2026 the Dutch cabinet states that where cloud use is material, a documented exit plan tested by the organisation itself is mandatory, with annual reassessment, covering both planned migration to another provider and a disruption of service. The policy names concentration and vendor dependency explicitly as risks and requires that any risk of foreign government interference is expressly weighed. Anyone supplying the Dutch public sector will see these requirements passed down.
What to do now
Start calculating instead of assuming. For each critical service, determine what switching would cost in data transfer, rebuilding integrations, reconfiguration and parallel licences, and how many months it would take. As long as that number does not exist, every negotiation is one without an alternative — and your vendor knows it.
Then record what you need to make that switch possible: return of your data in a usable, common format, a reasonable transition period after termination, vendor cooperation during migration, and clarity on where your data sits and how you are notified when that changes. And for renewals coming up in the next few months, watch for terms that run past 12 January 2027: a multi-year contract with switching charges that will soon be unlawful is a contract you can still negotiate today.