Microsoft And Amazon Face Antitrust Probe In UK Over Cloud Dominance
The UK”s communications regulator, Ofcom, has taken the step of requesting an antitrust investigation into the UK cloud market”s domination by tech giants Amazon and Microsoft. Ofcom”s concerns primarily revolve around issues to charges, making it challenging for businesses in the country to switch or utilise multiple cloud services. They have identified problems associated with the costs incurred when businesses wish to move their data away from the cloud, incentives that promote the use of a single cloud provider, and the existence of technical obstacles hindering transitions between cloud providers. Microsoft”s software licensing practices have raised concerns flagged by the Competition and Markets Authority (CMA), which aligns with Ofcom”s findings.
In the landscape of Britain”s public cloud infrastructure services market, 2022 witnessed the commanding presence of Amazon Web Services (AWS) and Microsoft, holding a combined market share of 70-80%, with Google trailing as the closest competitor, securing 5-10%. The predicament of several UK businesses struggling to switch or blend various cloud service providers has prompted Ofcom Director Fergal Farragher to announce the referral of the matter to the Competition and Markets Authority (CMA). The primary goal of this referral is to ensure that businesses leveraging cloud services continue to reap benefits. The CMA has responded positively to this move, emphasising the essential role of effective competition within the £7.5 billion ($9.1 billion) market.
The Competition and Markets Authority (CMA) will undertake an independent investigation to assess whether adverse impacts on competition exist, as reported by Reuters. Should such impacts be confirmed, the CMA will take necessary actions or recommend remedies. The investigation”s timeline projects completion by 2025. In response to Ofcom”s findings, Amazon has voiced disagreement, attributing them to a “fundamental misconception of how the IT sector functions” and asserting that unwarranted intervention could inadvertently harm IT customers and competition. Nevertheless, Amazon has expressed its willingness to cooperate constructively with the CMA. Microsoft has committed to upholding a highly competitive and innovative UK cloud industry, with a spokesperson affirming their intention to engage in constructive dialogue with the CMA.
Amit Zavery, Vice President and Head of Cloud Platforms at Google, underscored the significance of Ofcom”s referral in emphasising the need for an open cloud market devoid of vendor lock-in. Zavery stated that UK government agencies, businesses, and consumers aspire to make seamless transitions across cloud platforms while selecting services aligned with their specific requirements. Additionally, Google has confirmed its readiness to enable its products to function seamlessly on any cloud platform without limitations. Meanwhile, French and EU antitrust authorities are concurrently investigating cloud computing practices, with the French authority identifying potential competition restrictions and the EU scrutinising Microsoft”s practices in response to a complaint filed by trade group CISPE, which includes Amazon among its members.
