How to Terminate a SaaS Agreement Under the Data Act: Practical Guide
Stuck in a SaaS contract your company no longer needs? The EU Data Act gives you a legal right to switch providers. Eligibility, process, and pitfalls.
Your company signed a three-year SaaS contract. Eighteen months in, the tool no longer fits. Maybe the team switched to another platform, maybe the features never delivered what was promised, maybe the business simply moved on. The contract says you owe the full commitment. The vendor says there is no early exit.
Since 12 September 2025, the EU Data Act (Regulation (EU) 2023/2854) has introduced a right to switch providers for users of data processing services — and that covers most cloud-hosted SaaS. Your vendor can no longer lock you into a contract indefinitely when you want to migrate to another solution or bring the service in-house.
This article explains when this right applies, how to exercise it, and what can go wrong if you get the process wrong.
Disclaimer: This article provides general legal information on the Data Act’s switching provisions. It is not legal advice tailored to your specific situation. Every contract is different. Current as of March 2026.
The Data Act is not a data protection regulation like the GDPR. Its scope is broader: it applies to all data generated through the use of a data processing service — usage logs, metadata, functional outputs, performance data.
Chapter VI of the regulation (Articles 23–31) imposes specific obligations on providers of data processing services — SaaS, PaaS, IaaS — regarding portability and provider switching. The stated objective is to combat the technical and contractual lock-in that prevents businesses from changing solutions even when they have legitimate reasons to do so.
This matters because, until now, switching rights in SaaS were entirely governed by the contract. If the contract said no early exit, you had no early exit — short of a material breach claim, which is expensive and uncertain. The Data Act changes this balance.
Not all software falls within scope. Three conditions must be met before you can invoke the Data Act’s switching right.
The service must qualify as a “data processing service” under the regulation. Article 2(12) defines this category. In practice, most cloud-hosted SaaS platforms are covered: CRMs, ERPs, project management tools, marketing platforms, HR solutions, accounting software. On-premise software installed on your own servers is excluded.
The provider must offer the service to customers located in the European Economic Area. The provider’s headquarters are irrelevant. What matters is where the customer operates. A French company using a US-based SaaS is covered. A German company using an Israeli platform is covered.
The termination must be linked to a provider switch or service internalisation. The Data Act switching right is not a general right to terminate for convenience. It specifically applies when the customer intends to migrate to another provider or to bring the service in-house. The legal basis matters: if you frame your termination incorrectly, the vendor has grounds to push back.
In my experience auditing SaaS contracts, roughly 80% of B2B SaaS agreements fall within the Data Act’s scope. The main exclusions involve on-premise deployments, consulting services packaged as SaaS, or tools that do not genuinely process data as defined by the regulation.
Once your contract falls within scope, the vendor is bound by obligations that cannot be waived by contract. These provisions are mandatory — a conflicting clause in your terms of service does not override them.
Article 25 caps the notice period for a switching-related termination at two months. Regardless of what your contract says. If your agreement requires 6 or 12 months’ notice for early termination, that period is reduced to 60 days when you exercise the switching right.
The vendor must support the transition. Under Article 24, this means maintaining the service during the migration period, providing data in standard and interoperable formats, and cooperating reasonably with the new provider.
The regulation is specific about technical requirements: open formats, documented interfaces, data return within 30 days maximum.
The Data Act does not ban exit fees, but it constrains them heavily. I cover this in detail in a dedicated article on SaaS exit fees under the Data Act. The short version: fees must be proportionate and justified. From 12 January 2027, switching charges will be eliminated entirely (Article 29). In the current transitional period (September 2025 – January 2027), fees must reflect actual migration costs — not compensate the vendor for lost revenue.
Article 24(1)(a) requires the customer to be able to recover all data generated through the use of the service — not just personal data (that right already existed under the GDPR), but all operational and usage data. Partial exports, proprietary formats, and “non-extractable” data are no longer compliant with the regulation.
Before sending any notice, have your contract analysed to confirm the Data Act applies. Invoking the regulation incorrectly weakens your position and can trigger an unnecessary dispute.
Key checkpoints: Is the service cloud-hosted SaaS? Is your company in the EEA? Is the termination motivated by a provider switch or internalisation? What do the existing contractual clauses say about termination and data return?
I offer a free initial review of your contract to assess eligibility.
Terminating a SaaS contract is not purely a legal exercise. You need to plan the technical migration (to which tool? on what timeline?), the data recovery (which formats? what volume?), and the operational impact on your teams.
A termination notice sent without a migration plan behind it can put you in a difficult position if the vendor cuts access at the end of the 60-day notice period.
The notice must be legally sound. It should identify the legal basis (Data Act, Chapter VI), state the reason (provider switch or internalisation), specify the vendor’s obligations (assistance, data return, timelines), and set a clear schedule.
A poorly drafted notice — for example, one that invokes the Data Act without mentioning a provider switch, or one that frames the exit as termination for convenience — gives the vendor an argument to challenge.
During the notice period, the vendor must maintain the service and cooperate with the migration. This is the window for recovering your data, verifying its integrity, and coordinating with the incoming provider. If the vendor obstructs or delays restitution, this constitutes a breach of its obligations under the regulation.
Confusing Data Act termination with termination for convenience. The switching right has a specific legal basis and a specific regime. If your contract already provides an acceptable termination for convenience clause, it may be simpler to use that. The Data Act is an additional lever, not the only one.
Sending a template letter. Every SaaS contract is structured differently. Termination clauses, reversibility provisions, data ownership terms vary dramatically between vendors. A generic letter risks missing contractual specifics that work in your favour — or against you.
Ignoring the technical dimension. The right to recover your data is meaningless if nobody on your side is ready to receive, verify, and import it into the new system. Involve your technical team from day one.
Underestimating the vendor’s response. Some vendors cooperate quickly. Others challenge the Data Act’s applicability or attempt to impose disproportionate fees. Anticipating this response is part of the strategy.
The Data Act has been in force since September 2025. As of today, case law is still sparse and vendor practices vary significantly. Some providers have already updated their terms to incorporate switching rights; others have not changed anything and discover the issue when a customer sends a termination notice.
This transitional period creates both opportunities (vendors are not yet experienced at contesting) and risks (the framework has not yet been tested through litigation). This is precisely why I recommend having the process supervised by a lawyer who understands both the Data Act and the mechanics of SaaS contracts.
I help companies exercise their termination right under the Data Act. The process starts with a free contract review to assess eligibility and identify available options.
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