The UK market regulator writes in a (preliminary) conclusion that AWS and Microsoft’s cloud services could hamper competition.
The UK Competition and Markets Authority (CMA) has published a preliminary conclusion around the dominance of AWS and Microsoft in the cloud services market. According to the CMA, this concentrated market creates a barrier to competition and is detrimental to customers.
AWS and Azure would have a market share of up to 40 percent in the UK, according to the CMA, calling AWS and Microsoft “the two major cloud service providers.” The next step is a consultation round in which stakeholders can provide feedback. Afterwards, the CMA will make a final decision later this year.
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Anticompetitive
In late 2023, the CMA launched an investigation into the cloud services market in the United Kingdom. Specifically, the regulator focuses on Microsoft and AWS, which play a dominant role in the cloud market. Now the regulator is publishing a preliminary conclusion expressing concern about this concentrated market.
According to the CMA, this leaves companies with a limited choice of cloud service providers. An investigation would be needed to determine whether AWS and Microsoft qualify as “strategic market status” (SMS) providers. This would mean subjecting them to new restrictions that could counter anticompetitive behavior.
Moreover, the CMA repeatedly emphasizes the “strength in software” that Microsoft deploys. According to the regulator, the pricing and terms of software products such as Windows Server and Office prevent Microsoft from giving rival cloud providers such as AWS and Google a chance.
The CMA will examine whether and what measures are needed for a healthier cloud market in the UK. Following the stakeholder consultation round, a final decision from the CMA will follow at the end of this year.