Market regulator UK starts investigation into cloud services Amazon and Microsoft
The UK Competition and Markets Authority opens a market inquiry into the provision of cloud infrastructure services in the UK. The regulator focuses mainly on Amazon and Microsoft.
The CMA will investigate do to the cloud services in response to a report by British telecoms regulator Ofcom. That regulator has asked the CMA to investigate Amazon and Microsoft after its own investigation found evidence that those companies engaged in anti-competitive behavior.
Ofcom says the companies are making it difficult for customers to switch cloud providers or use multiple providers at the same time. For example, customers have to pay to get their data from the cloud, or get a discount if they use only one provider. Some cloud providers are also said to be introducing technical barriers to make it more difficult to switch providers.
“Ofcom’s report also outlines concerns it has heard about the software licensing practices of some cloud providers, in particular Microsoft,” the CMA said in its press release. An antitrust complaint was already filed against Microsoft in the EU about such ‘licensing practices’ last year. That was done by cloud industry organization CISPE. “Specifically, Microsoft is using its dominance in productivity software to drive European customers to its own Azure cloud infrastructure, to the detriment of European cloud infrastructure providers and IT service users,” the organization said at the time.
The CMA does not mention Amazon by name, although that company is specifically highlighted in Ofcom’s report. The telecoms regulator, which requested the CMA’s investigation, states that Amazon and Microsoft jointly control 70 to 80 percent of the cloud market in the United Kingdom. Ofcom also said it was specifically concerned about ‘the actions of Amazon Web Services and Microsoft due to their market position’. The closest competitor to those two companies, Google Cloud, has a market share of 5 to 10 percent within the UK.
The CMA investigation may last a maximum of eighteen months, although the provisional deadline is April 4, 2024. The British regulator then provides an ‘overview of theories about the damage and possible solutions to tackle that situation’. The CMA can also impose mandatory measures, including a forced sale of parts of a business, if serious problems are found. Microsoft and Amazon say in response to Reuters news agency that they will work ‘constructively’ with the CMA.