Ofcom has launched an investigation into the dominance of Microsoft and Amazon in the cloud computing market. The media watchdog referred the inquiry to the Competition and Markets Authority (CMA) after identifying features that limit competition and make it difficult for UK businesses to switch or use multiple cloud providers. Ofcom expressed particular concern about the position of market leaders Amazon and Microsoft, who account for 60% to 70% of cloud spend in the UK. The CMA will now examine the market and decide whether further action is required by April 2025.
The growth of cloud services, which rely on data centers, underpins the adoption of AI models such as OpenAI’s ChatGPT, Microsoft’s Bing Chat, and Google’s Bard. In response to Ofcom’s referral, the CMA highlighted the importance of effective competition in the cloud market, as many businesses now depend on cloud services. The CMA’s independent inquiry group will investigate the market and determine the necessary actions to ensure fair competition in the cloud computing industry.
The CMA emphasized the need for strong competition in digital markets to prevent market power from being concentrated in the hands of a few players. They aim to unlock the full potential of rapidly evolving markets to benefit people, businesses, and the UK economy. The CMA’s investigation into Microsoft’s cloud licensing terms is separate and is being conducted by the European Union.
Competition concerns
Ofcom has identified several practices in the cloud industry that raise concerns. These include egress fees charged by Amazon and Microsoft, which make it difficult for businesses to switch or use multiple cloud providers. There are also “technical barriers” to interoperability, hindering the combination of different cloud platforms and services. Additionally, committed spend discounts incentivize customers to stick with a single cloud provider, even if there are cheaper alternatives. Microsoft’s licensing terms have also drawn attention and are being investigated by the European Union.
Denial of responsibility! Vigour Times is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
