The UK's £7.5 billion public cloud infrastructure services market is under investigation, with Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT), two major players in the sector, being the primary targets. The probe, initiated by Ofcom and now escalated to the Competition and Markets Authority (CMA), is set to examine the firms' dominance in the market, which represented 70-80% of the UK's supply by revenue in 2022.
On Thursday, Ofcom referred the matter to the CMA, led by Sarah Cardell. The regulatory body raised concerns over practices such as discounts incentivizing single provider use, technical barriers to switching providers, and charges for data migration. The CMA's independent inquiry group will scrutinize these issues further and propose any necessary actions. The investigation is expected to wrap up by April 2025.
The escalation of the investigation comes amid concerns over anti-competitive behaviors like egress fees, interoperability restrictions, and committed spend discounts. While Google (NASDAQ:GOOGL) Cloud's Amit Zavery has voiced support for Ofcom's stance against vendor lock-in, AWS has countered Ofcom's findings.
AWS criticized Ofcom's approach as a "fundamental misconception" of the IT sector. The company warned that the investigation could lead to "unintended harm to IT customers" while emphasizing its commitment to promoting "robust competition among IT providers".
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