London (Brussels Morning Newspaper) – The UK’s antitrust regulator, known as the Competition and Markets Authority (CMA), said Amazon and Microsoft’s dominant standing in cloud computing is having a negative impact on competition, aggravated by technical and commercial obstacles to switching.
Tech companies Amazon, Microsoft, and Google have established massive businesses by providing access to computing resources — such as data storage and processing — through the internet, utilising data centres, which are large facilities housing dedicated hardware.
Are Microsoft and Amazon abusing their market power?
The Competition and Markets Authority stated that high market concentration and entry barriers in the cloud services sector have allowed both Microsoft and Amazon to maintain “significant unilateral market power,’ leading to prolonged periods of financial gains that surpass their capital expenditure costs.
The CMA is worried that practices like egress fees and harsh licensing terms create a “lock-in” effect, causing businesses to become stuck in contractual agreements that are hard to exit.
How did both companies challenge the CMA’s conclusion?
Microsoft stated that the regulator’s decision “misses the mark again, ignoring that the cloud market has never been as dynamic and competitive, with record investments and swift, AI-driven transformations.”
“Its recommendations fail to cover Google, one of the fastest-growing cloud market participants,”
a Microsoft spokesperson said.
Moreover, Amazon also challenged the CMA’s conclusions, stating that suggested new investigations into the two tech giants’ cloud dominance are “unwarranted.”
“It risks making the UK a global outlier at a time when businesses need regulatory predictability for the UK to maintain international competitiveness,”
an Amazon spokesperson told CNBC.
How is Google supporting the CMA’s cloud inquiry?
Google commended the CMA’s decision, describing it as a “watershed moment” for the U.K. Swift’s effort is required to ensure UK businesses pay a fair price and to promote choice, innovation, and economic growth in the U.K., stated Chris Lindsay, Google’s vice president of customer engineering for EMEA.
What concerns did Ofcom raise about cloud services?
Moreover, Ofcom’s year-long probe, completed in October 2023, found anti-competitive behaviours by both companies, such as high egress fees (charges for transferring data out), interoperability restrictions, and aggressive discounting practices that lock customers into exclusive contracts.
Following Ofcom’s findings, the cloud services market was formally referred to the CMA for a thorough antitrust investigation starting in late 2023, with an initial timeline extending into 2025 and later extended to August 2025.
