Microsoft and Amazon, facing an investigation in the United Kingdom for a monopoly in cloud services

Microsoft and Amazon they face a investigation in the United Kingdom for a monopoly on its cloud services. Apparently, according to the country’s competition authorities, both companies are making it difficult for their British customers to use various cloud service providers.

The Competition and Markets Authority (CMA), the body in charge of monitoring that there are no monopolies in the United Kingdom, has confirmed its opening with the aim of clarifying whether both actors in the cloud services and infrastructure market in the United Kingdom have used anti-competitive practices.

The entity made the decision to open the investigation following a report by the United Kingdom communications and media regulator, Ofcom, which concluded that the provision of cloud infrastructure in the country is highly concentrated, and that the competition it allows is limited.

As commented Sarah Cardell, CEO of the CMAin the entity they thank «that Ofcom has not given public cloud infrastructure services notice for in-depth examination. It is a £7.5bn market that supports a wide range of online services, from social media to foundational Artificial Intelligence models. Many companies now rely entirely on cloud services, making effective competition in this market essential.«. The CMA has assured that the investigation will end before April 2025.

Ofcom has indicated that in 2022 Microsoft and AWS together would account for between 70% and 80% of the total market share of the UK cloud infrastructure services sector. Google Cloud is its main competitor, but it only has between 5% and 10% of the cloud market share in the country.

In its report, this body has identified various market characteristics that make it more complicated for customers to change cloud providers, or use multiple service providers. Among them are fees for changing service.

Therefore “if customers have difficulty switching providers, or using several, it could make it difficult for competitors to grow and scale, and to efficiently challenge AWS in the sector, both in the case of customers new as well as existing ones.

Competition in cloud infrastructure is not the only aspect that Ofcom has expressed concern about in the report. He is also concerned about the software licensing practices of some cloud providers.. In particular, Microsoft.

Both Amazon and Microsoft have assured that they will interact constructively with the CMA, although it is likely that they will not agree with the results of the report or the nature of the investigation, as is often the case in these cases.

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