A company group with a subsidiary in the EU decides that the cloud SaaS platform it has used for years is no longer the right fit. EU Data Act switching rules now shape what happens next.

Legal counsel is asked what the exit looks like. They read the contract and report back: twelve months’ notice, migration assistance chargeable at the provider’s professional services rates, data export in the provider’s own format, and no clear position on what happens to the data afterwards.

But, since 12 September 2025, because of the EU Data Act cloud switching, rules now sit alongside the contract and can change how that exit works.

Chapter VI of the EU Data Act added a statutory switching layer for customers in the EU. For an exit, it changes three practical questions: how switching happens, what the provider must give you and what the provider may charge

It does not do what either side tends to assume.

How switching happens, according to the EU Data Act

Switching rights do not necessarily mean a free early exit. These are different questions, and it’s easy to confuse them.

The EU Data Act says that the notice period for starting the switching process is capped at two months. Your provider cannot set a long notice requirement to delay the start indefinitely. Then there is an ordinary transition period of up to 30 calendar days.

If a 30-day transition is technically not possible, the provider must notify you within 14 working days, explain why, and propose an alternative transition period of no more than seven months. You can extend the transition period once, separately, if you need more time for your own purposes. The contract must also provide that, where applicable, it is considered terminated once the switching process has been successfully completed.

But the EU Data Act does not abolish early-termination penalties. So it can determine how switching works and when the service contract ends, without wiping out the financial consequences of ending a fixed-term agreement early. That gives an in-house lawyer a precise question to put when an invoice arrives:

“Is this a charge for helping us switch, or compensation because we are ending the commercial term early?”

What the provider must actually give you, according to the EU Data Act

This is where the practical value sits for you.

For SaaS and platform services, the Data Act goes beyond saying ‘give the customer its data’. Providers must make open interfaces available free of charge, with sufficient information to enable software to communicate with the service. Where the relevant interoperability specifications or standards are unavailable, providers must, on request, export the data in a structured, commonly used and machine-readable format.

Test that against the export in our example. Suppose the provider offers a complete data dump in a format only its own software reads. You now technically possess your data.

Has the provider enabled switching, or merely handed you a file?

Ask that eighteen months before you leave, you get a useful answer. Ask it three weeks after giving notice, and you get a quotation.

What the provider may still charge

The fee structure is implemented in phases.

Until 11 January 2027, switching charges may still be imposed, limited to costs directly linked to the switch. From 12 January 2027, switching charges within the scope of the Data Act are prohibited.

That timing matters for anyone with a migration on the roadmap.

What happens to the old copy?

The contract must provide for a retrieval period of at least 30 calendar days after the agreed transitional period. Once that retrieval period ends (or a later period if agreed), the exportable data and digital assets must be erased, subject to applicable retention requirements.

That deadline can easily disappear from a migration plan once the new system is live. The project team has moved on. The old copy is still there.

Exit does not end when the new system goes live.

Does this apply to you?

For a South African or other non-EU group, the first question is not whether the provider operates in the EU. It is which group entity signed the contract. Chapter VI applies where a data processing service is provided to a customer in the EU. The Data Act defines the customer by reference to the person that entered into the contractual relationship with the provider.

If your EU subsidiary signed the SaaS or cloud contract, the switching regime has a much stronger basis to apply. If the South African parent contracted centrally and the EU subsidiary only uses the service, the position needs closer analysis. Provider terms show why this matters. Oracle’s current NetSuite Data Act addendum, for example, applies where the relevant order was signed by an entity legally registered and located in the EU. Centralised procurement may therefore affect more than purchasing efficiency. It can also affect which entity can rely on the Data Act’s switching rights.

The service itself must also be in scope. The definition of data processing services is broad enough to cover mainstream cloud and SaaS services, but highly customised arrangements may require separate analysis. Chapter VI currently applies to contracts entered into before and after 12 September 2025. The EU’s broader Digital Omnibus proposal could still change parts of the regime, so check the current position before relying on it.

Legal and IT need to plan the exit together

Your legal counsel can work out whether Chapter VI of the EU Data Act (Regulation (EU) 2023/2854) applies, what the provider may charge, and which addendum is affected. But he can’t determine from the contract whether the export format is usable, whether key integrations can move or whether a 30-day transition is realistic.

Your IT team can answer those questions. But they cannot decide whether an early-termination fee is a switching charge or contractual compensation for ending the term early.

Actions you can take next

  • Identify which entity actually contracts for each EU cloud or SaaS service.
  • Pull the provider’s current Data Act terms rather than relying only on the original agreement.
  • Separate switching charges from early-termination compensation and optional professional services.
  • Ask IT what can actually be exported, in what format, and what would prevent a 30-day migration.
  • Add the post-switching retrieval and deletion period to the exit plan.
  • If an exit is planned around January 2027, check which charges fall away before committing to the migration timetable.

If you have an EU entity planning to switch cloud or SaaS providers, we can assess which Data Act rights apply, how your provider’s terms have changed, and whether your exit plan reflects them.