UK watchdog flags Microsoft and Amazon for stifling cloud competition

The UK’s competition regulator is taking aim at Microsoft and Amazon, saying both companies are making it harder for others to compete in cloud computing. The Competition and Markets Authority (CMA) said Thursday it’s pushing for a deeper investigation under the country’s new tech rules.

According to the CMA, Microsoft and Amazon have carved out dominant positions in cloud infrastructure, giving them the power to control pricing and limit choices for businesses. The agency said the companies have earned profits well beyond their infrastructure costs, thanks in part to the difficulty customers face when trying to switch providers.

This isn’t just about market size. The CMA raised concerns about practices like egress fees – charges for moving data out of the cloud – and licensing restrictions that make it harder for businesses to leave or use alternative providers. The result, the agency said, is a “lock-in” effect that keeps customers stuck.

Microsoft disagrees, saying the CMA’s comments ignore how competitive and fast-changing the cloud industry is, especially with the rise of AI tools. A spokesperson added that the regulator’s focus overlooks Google.

Amazon also disagreed with the findings. The company said launching another probe was unnecessary and could make the UK less attractive to global businesses. “It risks making the UK a global outlier,” a spokesperson said.

Google, on the other hand, supported the move. Chris Lindsay, a vice president at Google, called the CMA’s action a “watershed moment” that could help UK companies access better prices and more choices.

The CMA said Microsoft’s licensing setup is another barrier. It’s cheaper to run Microsoft’s Windows Server on its own Azure platform than on competing clouds, which limits the appeal of alternatives and reduces competition.

As of now, Microsoft and Amazon each hold about 30% to 40% of the infrastructure-as-a-service (IaaS) market, according to the CMA. Google is the next biggest provider but only holds between 5% and 10%.

The CMA recommends that Microsoft and Amazon face a full investigation under the Digital Markets, Competition and Consumers (DMCC) Act – a new UK law meant to keep big tech firms from abusing their market power. Companies found to have “strategic market status” under the DMCC can face stricter oversight and rules aimed at restoring competition.

The move mirrors efforts in the EU, where regulators are also working to rein in dominant tech platforms and give smaller players a fairer shot. For now, the ball is in the UK government’s court on whether it will take this probe further.

(Photo by Bernd 📷 Dittrich)

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