RapidShare has announced a business model change that is causing panic among its non-premium users. After offering unlimited storage space to customers using its free service, the Swiss-based file-hoster is about to implement tough new limits. This Wednesday all free customers will be limited to just 5GB of free storage if they choose not to pay for a premium account. All excess files still hosted will be deleted forever April 3.

In today’s super-connected world we no longer have to store data solely on our desktop machines. We can now dump it into “the cloud” and access it seamlessly from any of our devices no matter where we are. It’s convenience on a grand scale but one that brings new concerns on the flipside – a lack of control over our own data.

In the wake of the Megaupload fiasco, today we bring news of another event with the potential to chip away further still at Internet users’ confidence in remote storage.

RapidShare is one of the best known brands in the file-sharing space. In recent times the company has gone to extreme lengths to update its image and has undertaken a number of business model modifications in order to turn its back on people who might use its service to infringe copyright.

Nevertheless, the service has remained popular, not least because it offers unlimited storage space to both free and paid users. As a result many people choose RapidShare to host their personal backups. However, the company has delivered a surprise announcement that will largely put an end to the unlimited free party.

This is how it works. If you have a free account at RapidShare with currently unlimited storage, from this Wednesday you will only be allowed to store a total of 5GB. If you do nothing then all your files stored at RapidShare over the 5GB limit will be deleted April 3. Just to be crystal clear – if you currently have 20GB of files, 15GB will be deleted.

“If you exceed your storage space limit, you will receive a warning email that files will be deleted,” RapidShare warns. “If you don’t add storage space within the next 24 hours or delete some of your files, we will delete files. That happens at midnight 24:00 CET.”

However, if free users want to “add storage space” – i.e give RapidShare some money – they can keep their files.

For 9.99 euros for 30 days (or 99.99 euros per year), users can have 250GB of storage space. The 500GB storage account costs 19.99 euros per 30 days or 199.99 per year.

So what happens when users want to store more than 500GB? TorrentFreak was told that a user asked RapidShare how much it would cost to host around 2TB of files and was given a price of 120 euros ($155) per month. For less money anyone can buy a real-life hard drive, not just once but every single month.

While RapidShare is of course free to change its business model whenever it pleases, doing so on such short notice is a real wake up call. The announcement of the new model was issued on March 12 and customers initially thought they only had until March 20 to pay up or have all files over the 5GB limit deleted the next day. RapidShare have since confirmed an extension to April 3.

It’s also worth noting that free users may only personally download 5GB of data each day, so anyone with a large amount of files stored with RapidShare needs to get a move on in order to retrieve them all before the deadline.

Needless to say, some paying customers are also unhappy with the changes and have been asking RapidShare for refunds. The company is processing those, but reportedly charging an admin fee of 15 euros.

RapidShare has adjusted its business model several times in the last few months and each time the changes appear to have resulted in less traffic for the site. This latest tactic isn’t likely to reverse the trend.

At the time of publication RapidShare had not responded to our request for comment.