UK’s Competition and Markets Authority (CMA) to Investigate Dominance of Amazon and Microsoft in Cloud Market
The UK’s Competition and Markets Authority (CMA) has launched an inquiry into the dominance of Amazon and Microsoft in the country’s cloud computing industry. With a combined market share of 60-70 percent, these two tech giants are facing scrutiny over egress fees, discounts, and technical barriers to switching.
The investigation was initiated following a referral by Ofcom, the telecoms regulator, which expressed concerns about the lack of competition and potential disadvantages for consumers. Ofcom highlighted issues such as egress fees, which could incentivize customers to stick with a single cloud provider, and technical obstacles that make it difficult to switch between providers.
Sarah Cardell, CEO of the CMA, welcomed Ofcom’s referral and emphasized the importance of effective competition in the £7.5bn cloud infrastructure services market. Many businesses now heavily rely on cloud services, which underpin various online services from social media to AI foundation models. Therefore, it is crucial to ensure fair and competitive practices within the market.
To conduct a thorough investigation, the CMA has appointed independent panel members who will act as decision-makers. The inquiry group will soon publish an issues statement, outlining the focus of the investigation for consultation. The inquiry is expected to conclude in April 2025.
The news of this investigation has been positively received by organizations and industry experts. Paul Mackay, EMEA regional VP for cloud at Cloudera, likened the current situation to the difficulties faced in switching banks or service providers in the past. He believes that regulators’ intervention led to industry modernization and greater flexibility for consumers. Mackay suggests that cloud providers should offer similar flexibility to customers, as currently, organizations face significant exit fees and various complexities when switching between cloud services.
Mark Boost, CEO of Civo, also supports the investigation and sees it as an opportunity for immediate industry action. Boost believes that emerging cloud providers are stepping up to offer a different way forward, challenging the dominance of the major players. These providers aim to prioritize user needs by offering transparent pricing, a streamlined experience, and reliable services.
As the investigation unfolds, its outcome remains uncertain. However, the involvement of the CMA signals a commitment to fair competition practices in the cloud market and the potential for changes that could benefit both businesses and consumers. The inquiry could pave the way for increased choice, flexibility, and innovation within the industry.
For further details and updates on the investigation, visit the CMA’s case page.
In conclusion, the CMA has launched a market investigation into the dominance of Amazon and Microsoft in the UK’s cloud computing industry. This investigation follows concerns raised by Ofcom regarding egress fees, discounts, and technical barriers to switching. The CMA aims to ensure effective competition in the £7.5bn market that underpins various online services. Independent panel members will oversee the inquiry, and its findings are expected in April 2025. Industry experts and providers welcome the investigation, hoping it will lead to greater flexibility and choice for organizations locked into cloud services.
