Highlights

• British regulator Ofcom urges the Competition and Markets Authority (CMA) to investigate Amazon and Microsoft‘s dominance in the UK cloud market, citing difficulties for local businesses in using multiple cloud providers.
• Ofcom’s study emphasizes concerns over Amazon Web Services (AWS) and Microsoft due to their significant market presence, prompting the call for a competition inquiry.
• Businesses express apprehension over the complexity of switching or combining cloud providers, prompting Ofcom’s decision to refer the matter to the CMA.

In a move to address growing concerns over the domination of the UK cloud market by U.S. tech giants, Amazon and Microsoft, British media regulator Ofcom has formally requested an investigation by the country’s antitrust authority. Ofcom’s study, initiated last year, has identified challenges faced by UK businesses in utilizing multiple cloud suppliers effectively.

“The CMA (Competition and Markets Authority) will now conduct an independent investigation to decide whether there is an adverse effect on competition, and if so, whether it should take action or recommend others to take action,” stated Ofcom.

Notably, Ofcom had previously expressed reservations about the practices of Amazon Web Services (AWS) and Microsoft in April, citing their substantial market positions. This move follows a recent Reuters report anticipating the regulator’s push for an antitrust investigation.

Businesses in the UK have voiced concerns over the complexities involved in switching or combining cloud providers. Fergal Farragher, Director at Ofcom overseeing the Market Study, stated, “So, we’re referring the market to the CMA for further scrutiny, to make sure business customers continue to benefit from cloud services.”

The CMA welcomed the referral, underscoring the critical role cloud services play in today’s business landscape. It emphasized that effective competition in this 7.5 billion pound ($9.11 billion) market is imperative.

Ofcom’s study indicates that AWS and Microsoft jointly held a substantial 70% to 80% market share of the UK public cloud infrastructure services market in 2022. Google emerged as their closest competitor, commanding a share of 5-10%.

The CMA aims to conclude its comprehensive investigation by April 2025.

Source:Reuters