UK’s regulator of communications and media businesses, Ofcom, the Office of Communications, has requested the antitrust authority to investigate the dominance of the UK cloud market by US tech giants, Amazon and Microsoft.
Ofcom says that certain features are there that make it harder for businesses in the country to switch or use multiple cloud services. The regulator found issues with charges that customers have to pay when they want to move their data out of the cloud, discounts to use only one cloud provider, and technical barriers to switching between cloud providers.
The Competition and Markets Authority (CMA) has also raised concerns about Microsoft’s software licensing practices, which were highlighted in Ofcom’s report.
According to Ofcom, in 2022, Amazon Web Services (AWS) and Microsoft dominated Britain’s public cloud infrastructure services market with a combined 70-80% share. Google was their closest competitor with 5-10%.
Several UK businesses have raised concerns with Ofcom that it is too difficult for them to switch or mix and match cloud service providers.
In response, Ofcom Director Fergal Farragher has announced that the market will be referred to the Competition and Markets Authority (CMA) for further investigation. The aim of this investigation is to ensure that businesses using cloud services continue to benefit from them. The CMA has welcomed this move, stating that many businesses rely on cloud services, and effective competition in the £7.5 billion ($9.1 billion) market is essential.
The Competition and Markets Authority (CMA) will conduct an independent investigation to determine if there is an adverse impact on competition, reports Reuters. If so, they will take action or recommend others to do so, according to Ofcom. The investigation is expected to be completed by 2025.
Amazon has disagreed with Ofcom’s findings, stating that they were based on a “fundamental misconception of how the IT sector functions, and the services and discounts on offer.” They added that any unwarranted intervention could cause unintended harm to IT customers and competition. However, Amazon has expressed its willingness to work constructively with the CMA.
Microsoft has committed to maintaining a highly competitive and innovative UK cloud industry. A Microsoft spokesperson said they will engage constructively with the CMA.
According to Amit Zavery, Vice President and Head of Cloud Platforms at Google, the referral made by Ofcom highlights the importance of creating an open cloud market without any vendor lock-in. He stated that UK government agencies, businesses, and consumers wish to seamlessly transition across cloud platforms and select services that align with their requirements. Additionally, Zavery confirmed that Google would permit its products to function on any cloud without any consequences.
French and EU antitrust authorities are investigating cloud computing practices. The French authority identified potential competition restrictions, while the EU is scrutinizing Microsoft’s practices following a complaint by trade group CISPE, including Amazon among its members.
Ofcom says that certain features are there that make it harder for businesses in the country to switch or use multiple cloud services. The regulator found issues with charges that customers have to pay when they want to move their data out of the cloud, discounts to use only one cloud provider, and technical barriers to switching between cloud providers.
The Competition and Markets Authority (CMA) has also raised concerns about Microsoft’s software licensing practices, which were highlighted in Ofcom’s report.
According to Ofcom, in 2022, Amazon Web Services (AWS) and Microsoft dominated Britain’s public cloud infrastructure services market with a combined 70-80% share. Google was their closest competitor with 5-10%.
Several UK businesses have raised concerns with Ofcom that it is too difficult for them to switch or mix and match cloud service providers.
In response, Ofcom Director Fergal Farragher has announced that the market will be referred to the Competition and Markets Authority (CMA) for further investigation. The aim of this investigation is to ensure that businesses using cloud services continue to benefit from them. The CMA has welcomed this move, stating that many businesses rely on cloud services, and effective competition in the £7.5 billion ($9.1 billion) market is essential.
The Competition and Markets Authority (CMA) will conduct an independent investigation to determine if there is an adverse impact on competition, reports Reuters. If so, they will take action or recommend others to do so, according to Ofcom. The investigation is expected to be completed by 2025.
Amazon has disagreed with Ofcom’s findings, stating that they were based on a “fundamental misconception of how the IT sector functions, and the services and discounts on offer.” They added that any unwarranted intervention could cause unintended harm to IT customers and competition. However, Amazon has expressed its willingness to work constructively with the CMA.
Microsoft has committed to maintaining a highly competitive and innovative UK cloud industry. A Microsoft spokesperson said they will engage constructively with the CMA.
According to Amit Zavery, Vice President and Head of Cloud Platforms at Google, the referral made by Ofcom highlights the importance of creating an open cloud market without any vendor lock-in. He stated that UK government agencies, businesses, and consumers wish to seamlessly transition across cloud platforms and select services that align with their requirements. Additionally, Zavery confirmed that Google would permit its products to function on any cloud without any consequences.
French and EU antitrust authorities are investigating cloud computing practices. The French authority identified potential competition restrictions, while the EU is scrutinizing Microsoft’s practices following a complaint by trade group CISPE, including Amazon among its members.
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