UK Antitrust Regulator Probes Cloud Giants Over Anti-Competitive Practices

Microsoft and Amazon, two of the world's biggest tech behemoths, find themselves under the UK regulatory microscope amid allegations of stifling competition in the cloud infrastructure services market.

by Faruk Imamovic
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UK Antitrust Regulator Probes Cloud Giants Over Anti-Competitive Practices
© Getty Images News/Ethan Miller

Microsoft and Amazon, two of the world's biggest tech behemoths, find themselves under the UK regulatory microscope amid allegations of stifling competition in the cloud infrastructure services market.

A Concentrated Market Raises Eyebrows

The UK's Competition and Markets Authority (CMA) announced on Thursday its plans to delve deep into the country's cloud infrastructure services sector.

Triggered by a revealing report from Ofcom, Britain's esteemed media and communications regulator, the CMA's investigation seeks to unravel whether industry leaders are indulging in anti-competitive behaviors. Ofcom's research underlined a significant concentration in the supply of cloud infrastructure within the UK, suggesting limited competition within the sector.

CMA's Chief Executive Officer, Sarah Cardell, articulated the gravity of the matter, “This is a £7.5 billion market that underpins a whole host of online services — from social media to artificial intelligence foundation models.

Many businesses now completely rely on cloud services, making effective competition in this market essential”. The CMA has marked April 2025 as its deadline for concluding this probe.

The Dominance of Microsoft and Amazon

Data from Ofcom's report paints a concerning picture.

The combined market share of Microsoft and Amazon Web Services (AWS) in the UK cloud infrastructure services realm ranged between a staggering 70-80% last year. Google, their nearest rival, lagged far behind, clutching onto a mere 5-10% share.

But it's not just about market share. The Ofcom report underscored specific market features that act as barriers, hindering customers from seamlessly switching providers or utilizing multiple ones. Among these barriers, switching fees stand out as a notable deterrent.

Such challenges could potentially cripple newer entrants from effectively rivaling established giants like AWS and Microsoft. Ofcom's statement encapsulated the potential repercussions, “If customers have difficulty switching and using multiple providers, it could make it harder for competitors to gain scale and challenge AWS and Microsoft effectively for the business of new and existing customers”.

Adding another layer to the controversy, Ofcom's findings also highlighted questionable software licensing practices by some cloud providers, singling out Microsoft in particular. In response to the impending scrutiny, both Microsoft and Amazon have pledged to engage "constructively" with the CMA, signaling a cooperative stance towards the investigation.

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