Amazon.com Inc. and Microsoft Corp’s cloud services face an investigation by the UK’s antitrust watchdog over concerns the US firms may be abusing their market power.
The Competition and Markets Authority said on Thursday it’s opening a market investigation into the supply of public cloud infrastructure in the UK. The probe follows a year-long study from telecommunications regulator Ofcom which found evidence that major players such as Amazon and Microsoft made it hard for customers to use multiple suppliers or switch. The two companies provide increasingly essential remote storage and computing which has become more and more prevalent across business.
“Some UK businesses have told us they’re concerned about it being too difficult to switch or mix and match cloud provider, and it’s not clear that competition is working well,” Fergal Farragher, the Ofcom director responsible for the study, said in a statement. Ofcom highlighted the fees paid when transferring data out of the cloud, a lack of interoperability, and discounting which might encourage staying with a single provider.
The CMA’s market investigations typically last around 18 months and the agency has the power to impose structural remedies, selling off part of their business to improve competition, if significant issues are found.
This is a £7.5 billion ($9.1 billion) market “that underpins a whole host of online services – from social media to AI foundation models,” CMA CEO Sarah Cardell said in a separate statement. “Many businesses now completely rely on cloud services, making effective competition in this market essential.”
Ofcom, which also oversees broadcasting and the postal service, opened a probe last year on concerns that the so-called hyperscale cloud providers — particularly Amazon’s AWS and Microsoft’s Azure — might limit innovation and growth. Together they account for four-fifths of revenue in the UK public cloud infrastructure market, with Alphabet Inc.’s Google Cloud accounting for another 5% to 10%, Ofcom said.
The European Union has also looked into complaints about the cloud industry, over potential antitrust violations by Microsoft. Germany’s Federal Cartel Office cited the “strong increase in the importance” of Microsoft’s cloud services when it announced its own probe into the firm’s market power earlier this year.
Representatives for Amazon and Microsoft didn’t immediately respond to requests for comment.