UK regulator demands investigation into Amazon and Microsoft's cloud dominance
British media regulator Ofcom has called on the UK's antitrust authority to look into the dominance of Amazon and Microsoft in the UK cloud market. Fergal Farragher, Ofcom's Consumer Protection Director, stated that UK businesses expressed concerns about the difficulty in switching or using multiple cloud providers. Now, the Competition and Markets Authority (CMA) is expected to carry out an independent investigation to figure out if there's a negative impact on competition and whether any action needs to be taken.
UK regulator seeks antitrust probe into cloud market
Last year, Ofcom started looking into cloud services and voiced concerns in April about the practices of Amazon Web Services (AWS) and Microsoft due to their market positions. The regulator intended to ask the competition authority to investigate these concerns. UK businesses have told Ofcom that they find it hard to switch or mix and match cloud providers, leading Ofcom to refer the market to the CMA for further examination.
Concerns over Amazon Web Services and Microsoft's market positions
Ofcom's research showed that AWS and Microsoft held a combined market share of 70% to 80% in the UK public cloud infrastructure services market by revenue in 2022. Their closest competitor was Google, with a market share of 5% to 10%. The CMA has welcomed the move, stating that many businesses now completely depend on cloud services, making effective competition in the £7.5 billion market crucial.
Market share and closest competitors
The CMA aims to wrap up its investigation by April 2025. This inquiry will determine if there's a negative effect on competition within the UK cloud market due to Amazon and Microsoft's dominance, and if so, whether action should be taken or recommended for others to take action. The goal of this investigation is to make sure that business customers continue to benefit from cloud services in a competitive environment.
