Cloud switching fees end in the EU on 12 January 2027. Here’s what that does and doesn’t change

From 12 January 2027, providers of cloud and software services can no longer charge customers in the EU for switching to another provider or back to their own infrastructure. The rule is in the EU Data Act. It applies to every provider serving customers in the EU, wherever the provider is based, and it covers the fees for moving your data out as part of the switch.

It is a real change for anyone who has looked at an exit and decided the bill for leaving was too high. It is also narrower than some headlines suggest, and most of the switching rules already apply: they have been in force since 12 September 2025. The end of switching charges is the last step. This article sets out what the rule does, what it leaves alone, and what the law says about notice and timing.

What changes on 12 January 2027

The Data Act gives customers of data processing services, which includes cloud infrastructure, platforms and SaaS, a right to switch. From 12 January 2027, a provider may not impose switching charges on a customer who uses that right.

The regulation defines switching charges as charges, other than standard service fees or early termination penalties, for the actions it requires for switching to another provider or to on-premises infrastructure, including data egress charges. So the fee for pulling your data across the network as part of a switch is covered.

Until then: reduced, at-cost charges

The ban didn’t arrive overnight. Since the Data Act started to apply on 12 September 2025, and until 12 January 2027, providers may charge only reduced switching charges, but those may not exceed the provider’s own costs directly linked to the switch, and the provider has to set them out before you sign. If you are switching before January, it is worth asking for that breakdown.

What the rule doesn’t remove

• Ordinary egress. Data transfer you pay for in normal operation, outside a switch, isn’t a switching charge.
• Egress for parallel use. If you use several providers at the same time, a provider can still charge egress for it, but only to pass on its own egress costs.
• Standard service fees. You still pay for the service until the switch is done.
• Early termination penalties. Penalties for ending a fixed-term contract early are treated separately from switching charges. The provider has to set them out before you sign, and they can still apply.
• Custom-built services. Services where most of the main features were built for one customer, and that aren’t offered at broad commercial scale, are exempt from the end of switching charges. Time-limited test or evaluation versions fall outside the switching rules altogether. In both cases the provider has to tell you before you sign which obligations don’t apply.
• The work itself. Re-platforming, testing, retraining people and running two environments side by side cost the same as before.

In short: the fee for leaving goes away, but the effort and the contract terms don’t.

Notice and timing

The Data Act also sets limits on the switch itself, and these already apply. Contracts have to cap the notice period for starting a switch at two months. As a rule, the switch then has to be completed within a transition period of 30 calendar days, during which the provider keeps the service running and helps with the move.

Before your next renewal

A renewal is the best moment to work out what leaving would really cost. We have put the questions worth asking into a short checklist: Five questions to ask before you renew a cloud contract.

Sources

• Regulation (EU) 2023/2854 (Data Act): Article 1(3)(f) for providers serving customers in the EU; Article 2(34)–(36) for the definitions of switching, data egress charges and switching charges; Article 25(2) for notice and the transition period; Article 29 for the gradual withdrawal of switching charges; Article 31 for custom-built services and test versions; Article 34 for parallel use.

This article explains the regulation in general terms. It isn’t legal advice; check how it applies to your contracts with your own counsel.