The Data Act Ends Egress Fees for Leaving, Not for Multi-Cloud

The Assumption to Drop

If your 2027 cloud plan assumes that the EU Data Act makes moving data between providers free, it is built on a misreading. From 12 January 2027 the Act bans charges for switching: leaving one provider for another, or for your own infrastructure. It does not ban charges for data that flows between providers while you run both. That traffic, the everyday plumbing of a multi-cloud estate, remains chargeable at cost, under a separate article that has applied since 12 September 2025 and has no end date.

The difference is not a footnote. It decides whether a dual-provider architecture carries a permanent transfer cost, which contracts are worth renegotiating before January, and what evidence you can demand from a provider that keeps billing for egress. The opportunity is real, but it is the opportunity to leave cheaply. It is not the opportunity to mix freely.

What the Instrument Says

The instrument is Regulation (EU) 2023/2854, the Data Act, adopted on 13 December 2023 and published in the Official Journal on 22 December 2023¹. Two provisions govern egress, and they are triggered by different things.

Article 29(1), on switching: "From 12 January 2027, providers of data processing services shall not impose any switching charges on the customer for the switching process"². Until then, under Article 29(2) and (3), providers may impose reduced switching charges that do not exceed the costs directly linked to the switching process concerned².

Article 34(2), on in-parallel use: "Where a data processing service is being used in parallel with another data processing service", providers "may impose data egress charges, but only for the purpose of passing on egress costs incurred, without exceeding such costs"³.

The definitions in Article 2 tie the two together. Switching charges are charges, other than standard service fees or early termination penalties, imposed "for the actions mandated by this Regulation for switching to the system of a different provider or to on-premises ICT infrastructure, including data egress charges"⁴. Switching is the process by which the customer "changes from using one data processing service to using another"⁴. Egress is swept into the ban only when it is part of that change.

The recitals remove any doubt about intent. Recital 99 says in-parallel egress "can be an ongoing activity, in contrast with the one-off egress required as part of the switching process", and that providers "should therefore continue to be able to impose data egress charges", not exceeding the costs incurred, for in-parallel use after the three-year transition¹.

The ban ends egress fees at the exit door. Traffic that keeps flowing between two live providers stays billable, at cost, indefinitely.

Who Is Bound, and From When

The obligations fall on providers of data processing services: a definition broad enough to cover infrastructure, platform and software services delivered on demand from configurable shared resources⁴. The customer is the beneficiary, not the obligated party.

The dates are fixed in the text:

• 12 September 2025: the Regulation applies generally (Article 50)⁷. Article 34, including the in-parallel egress cost cap, has applied since then.
• 11 January 2024 to 12 January 2027: transition, during which switching charges may be imposed but only up to direct costs (Article 29(2)–(3))².
• 12 January 2027: switching charges, including egress for switching, fall to zero (Article 29(1))².

There is no revenue or size threshold in Articles 29 or 34. The limits on reach come from the type of service, set out below.

What Compliance Requires

For providers, the switching regime carries disclosure duties as well as a price cap. Before contracting, they must give prospective customers clear information on standard service fees, early termination penalties and the reduced switching charges that may apply during the transition (Article 29(4)), and make that information publicly available, where applicable, through a dedicated section of their website or another easily accessible route (Article 29(6))².

For in-parallel egress, the obligation is a ceiling: the charge may only pass on egress costs incurred, without exceeding them³. The instrument does not define "costs incurred" or prescribe a cost-allocation method. A provider that keeps charging for in-parallel egress after January 2027 must therefore be able to justify the figure as cost, but no published guidance yet says how that justification should be built. That is a gap in the rule, not a licence: a margin on in-parallel egress is already outside what Article 34(2) allows.

Three things are expressly not switching charges and survive the ban: standard service fees for the service itself, proportionate early termination penalties in fixed-term contracts, and additional services the customer requests at an agreed price (Article 2(36); recital 89)⁴¹.

How the Misreading Spread

The error has an understandable origin. The European Commission's own fact page states that the Act "will also entirely remove switching charges, including charges for data egress (i.e. charges for data transit), from 12 January 2027"⁸. That sentence is accurate about switching. It says nothing about Article 34, and a reader skimming for "egress" takes away a blanket rule.

Commercial commentary has carried the shortened version further. An Irish hosting provider's guide lists the row for 12 January 2027 as "All switching and egress charges banned"⁹. A trade magazine told CIOs that "Egress and switching fees vanish EU-wide on that date, for IaaS, PaaS and SaaS alike"¹⁰. Neither mentions the in-parallel exception. Careful legal commentary does: Travers Smith, under the heading of what providers may still charge after January 2027, lists multi-cloud deployment, where providers "can still charge for data egress" but no more than costs actually incurred¹¹.

The market has, in part, moved ahead of the law. Google Cloud's Data Transfer Essentials, launched on 10 September 2025, zero-rates qualifying in-parallel traffic between Google Cloud and other providers for EU and UK customers, while noting that "the Act allows cloud providers to pass through costs to customers"¹². Google is an interested party, and the offer is voluntary, scoped to qualifying traffic and revocable. It is a commercial choice, not evidence of what the law requires.

Where the Ban Does Not Reach

Beyond in-parallel use, four limits matter for planning.

1. Custom-built services. Article 29 does not apply to services whose main features have mostly been custom-built for an individual customer, or whose components were all developed for that customer, where the service is not offered at broad commercial scale through the provider's catalogue (Article 31(1))⁵.
2. Test versions. None of the switching chapter applies to non-production versions provided for testing and evaluation for a limited period (Article 31(2))⁵.
3. Movement inside one provider. Data egress is defined as transfer from a provider's infrastructure "to the system of a different provider or to on-premises ICT infrastructure"⁴. Transfers between regions of the same provider fall outside both the ban and the cost cap. This follows from the definition; it is our reading, not a stated carve-out.
4. Fees that are not switching charges. Standard service fees and proportionate early termination penalties remain, as above⁴¹.

Enforcement: None Yet

No enforcement action on switching or in-parallel egress charges has been observed. Penalties are left to Member States, which must set rules that are "effective, proportionate and dissuasive" (Article 40(1))⁶; the Act sets no EU-level fine for these chapters.

National machinery is incomplete. A Simmons & Simmons review across all 27 Member States, checked in September 2026, identified only six with formally designated and operational Data Act authorities: Germany, the Netherlands, Denmark, Finland, Malta and Lithuania, leaving 21 where no fully operational enforcement authority could be identified¹³. In Ireland, home to many providers' EU entities, the draft General Scheme of the Data Bill 2025 would designate ComReg for switching and interoperability and envisages sanctions of up to 4% of EU turnover, but it is still at pre-legislative scrutiny¹⁴. That figure is a proposal, not law.

The practical consequence: no regulator or court has yet said what counts as "costs incurred", or where switching ends and in-parallel use begins. Until one does, the text is the only authority, and providers' own characterisations will fill the gap.

What Is Contested

The boundary between switching and in-parallel use. The Act expects customers to be able to unbundle individual services from broader bundles¹⁵, so a customer may move one workload while keeping others where they are. Whether a given transfer is part of a (partial) switch, and so free from January 2027, or is in-parallel egress, and so chargeable at cost, is not settled by the text in every case. The same bytes can be priced differently depending on how the contract and the migration are framed. This is untested.

The meaning of cost. "Costs incurred" is undefined³. The Commission may adopt delegated acts establishing a mechanism to monitor switching charges (Article 29(7))², but that power concerns switching, not in-parallel egress, and no such act has been observed.

The Digital Omnibus. A Council Presidency compromise text (ST 12535/26 of 3 September 2026) would, for certain custom-made services under contracts concluded on or before 12 September 2025, disapply Article 34 and all of Chapter VI except Article 29¹³. Simmons & Simmons is explicit that this "is a Presidency compromise text for discussion, not an agreed Council position" and that until adoption "the Data Act continues to apply as it stands"¹³. Article 29's zero-charge rule would survive under the text as drafted. Nothing in the Omnibus is law.

“The opportunity is real, but it is the opportunity to leave cheaply. It is not the opportunity to mix freely.”

What This Means for Multi-Cloud Strategy

Read correctly, the Act changes the economics of two different strategies in two different ways.

Exit becomes a credible lever. From January 2027 the transfer cost of leaving a provider falls to zero for in-scope services. A credible exit strengthens a customer's position in renewal negotiations, and the Article 29(4) disclosures give it a factual basis. The leverage comes from being able to leave, not from staying in two places.

Multi-cloud remains a cost line. A deliberate dual-provider estate — for resilience, for best-of-breed services, for concentration-risk reasons — keeps paying for the traffic between providers, unless a provider chooses to waive it. What changes is the nature of the charge: since September 2025 it may only recover cost, so a pricing schedule that looks like margin is open to challenge on the text. Voluntary zero-rating programmes help, but they are commercial offers that can narrow or end; a business case should not treat them as a legal entitlement.

Architecture should not depend on the characterisation question. A design whose economics rely on in-parallel traffic being treated as "switching" carries untested legal risk. If an architecture only works at zero transfer cost, model it at cost and treat any waiver as upside.

The Judgement

Correct the assumption first. From 12 January 2027 the Data Act frees the exit, not the multi-cloud estate. Before then, take three bounded steps.

1. Classify flows. Separate one-off migration traffic from continuing cross-provider traffic in your current and planned estate, because the law prices them differently.
2. Test the cost basis. For continuing cross-provider egress, ask each provider how its charge reflects egress costs incurred, as Article 34(2) has required since 12 September 2025. A charge that cannot be explained as cost is the one worth challenging.
3. Plan exits on the zero-charge date. Use 12 January 2027, and the Article 29(4) disclosures, as the anchor for renewal and exit planning, while recognising that standard fees and proportionate early termination penalties survive.

This brief describes the instrument as it stands. It is not legal advice, and where enforcement and the Omnibus are concerned, the position may move.