Antitrust

UK regulator calls for antitrust scrutiny of Amazon and Microsoft's cloud market share

Britain's media regulator urged the country's antitrust body to look into Amazon (AMZN.O) and Microsoft's (MSFT.O) domination of the UK cloud market on Thursday.

According to Ofcom, it discovered elements that made it more difficult for UK firms to utilize several cloud providers.

According to Ofcom, Amazon Web Services (AWS) and Microsoft will have a combined 70-80% share of the UK public cloud infrastructure services market in 2022. Google (GOOGL.O) was their closest competition, accounting for 5-10% of the market.

"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," it stated.

Amazon stated that it disagreed with Ofcom's conclusions, which were based on "a fundamental misunderstanding of how the IT sector functions, as well as the services and discounts on offer."

"Any unwarranted intervention could lead to unintended harm to IT customers and competition," stated a spokeswoman.

However, it stated that it would cooperate with the CMA.

Microsoft stated that it is dedicated to keeping the UK cloud market creative and competitive. "We will engage constructively with the CMA," a Microsoft representative stated.

Ofcom stated in April that it was concerned about AWS and Microsoft's practices due to their market dominance and intended to request an investigation from the competition authority.

According to Reuters, Ofcom is set to request an antitrust inquiry.

UK firms complained to Ofcom that switching or combining cloud providers was too complex.

"As a result, we're referring the market to the CMA for further investigation, to ensure that business customers continue to benefit from cloud services," Ofcom Director Fergal Farragher said.

The CMA applauded the action, stating that because many firms rely on cloud services, effective competition in the 7.5-billion-pound ($9.1 billion) industry is critical.

The French antitrust authorities have also expressed interest in cloud computing. It stated in June that different practices in the industry might limit competition, paving the path for future investigations.

Following a complaint by the trade association Cloud Infrastructure Services Providers in Europe (CISPE), which includes Amazon, EU antitrust inspectors are also looking into Microsoft's cloud computing practices.

According to Google Vice President Amit Zavery, Ofcom's referral underlined the importance of creating an open cloud market with no vendor lock-in.

"UK government agencies, businesses, and consumers want to move easily across cloud platforms and choose which services best meet their needs," he said, adding that Google will continue to enable its products to function without penalty on any cloud.

The CMA's inquiry will be completed by April 2025.