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Ofcom, the British communications regulator, has taken a significant step by requesting that the Competition and Markets Authority (CMA) investigate the dominant positions of US tech giants Amazon and Microsoft in the UK cloud market. This decision follows Ofcom’s recent study, which uncovered various factors that create barriers for UK businesses seeking to utilize multiple cloud providers.
“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.
The investigation into cloud services by Ofcom, initiated last year, raised concerns regarding the market practices of Amazon Web Services (AWS) and Microsoft, primarily due to their substantial market influence. Of particular concern was the difficulty UK businesses faced when attempting to switch or combine cloud providers.
Fergal Farragher, Director at Ofcom responsible for the market study, commented, “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 this referral, recognizing that numerous businesses now heavily rely on cloud services, emphasizing the importance of maintaining effective competition within the UK’s £7.5 billion cloud market.
According to Ofcom’s findings, in 2022, AWS and Microsoft jointly held a market share of 70-80% in the UK public cloud infrastructure services sector, with Google as their closest competitor, holding a share of 5-10%.
The CMA expects to conclude its investigation by April 2025.
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