British communications regulator Ofcom on Thursday asked the country’s antitrust authority to investigate US tech giants Amazon and Microsoft’s dominance of the UK cloud market.
Ofcom said its study identified features that made it more difficult for UK businesses to use multiple cloud suppliers.
“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,” Ofcom said.
Ofcom, which started looking into cloud services last year, had said in April it was particularly worried about the practices of Amazon Web Services (AWS) and Microsoft because of their market positions, and it planned to ask the competition regulator to investigate.
UK businesses told Ofcom they were concerned about it being too difficult to switch or mix and match cloud provider.
“So, we’re referring the market to the CMA for further scrutiny, to make sure business customers continue to benefit from cloud services,” said Fergal Farragher, Ofcom’s director responsible for the market study.
The CMA welcomed the move, saying many businesses now completely relied on cloud services, making effective competition in the UKP7.5-billion market essential.
Direct correlation between cloud adoption and GDP growth
Ofcom said AWS and Microsoft had a 70-80% combined market share of UK public cloud infrastructure services market in 2022. Google was their closest competitor with a share of 5-10%, Ofcom added.
The CMA said it would conclude its investigation by April 2025. — Yadarisa Shabong and Paul Sandle, (c) 2023 Reuters
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