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UK Regulator Requests An Antitrust Investigation Into Amazon And Microsoft's Domination Of The Cloud

UK Regulator Requests An Antitrust Investigation Into Amazon And Microsoft's Domination Of The Cloud
The UK's media regulator on Thursday requested an investigation into the dominance of Microsoft and Amazon in the UK cloud industry by the nation's antitrust authorities.
Ofcom claimed to have found characteristics that made it more challenging for UK enterprises to work with numerous cloud providers.
According to Ofcom, Amazon Web Services (AWS) and Microsoft together held 70–80% of the market for public cloud infrastructure services in Britain in 2022. Google had a 5–10% market share and was their main rival.
"The CMA (Competition and Markets Authority) will now conduct an independent investigation to decide whether there is an adverse effect on competition, and if so, whether it should take action or recommend others to take action," it said.
Ofcom's findings, according to Amazon, were based on "a fundamental misunderstanding of how the IT sector functions, and the services and discounts on offer." Amazon said it disagreed with Ofcom's findings.
"Any unwarranted intervention could lead to unintended harm to IT customers and competition," a spokesperson said.
However, it promised to cooperate constructively with the CMA.
Microsoft declared its dedication to preserving the UK cloud market's innovation and fierce competition. A Microsoft representative added, "We will engage with the CMA in a positive manner.
Because of AWS and Microsoft's dominant market positions, Ofcom stated in April that it was concerned about their business practises and intended to request an investigation from the competition watchdog.
On Tuesday, there were rumours that Ofcom might demand an antitrust inquiry.
Businesses in the UK complained to Ofcom about how difficult it was to switch between or combine several cloud providers.
"So, we're referring the market to the CMA for further scrutiny, to make sure business customers continue to benefit from cloud services," Ofcom Director Fergal Farragher said.
The CMA applauded the decision, stating that given the widespread use of cloud services by enterprises, there must be healthy competition in the 7.5 billion pound ($9.1 billion) industry.
Additionally, the French antitrust authorities has been interested in cloud computing. It stated in June that a number of industry practises would potentially limit competition, opening the door for future investigations.
As a result of a complaint filed by industry association Cloud Infrastructure Services Providers in Europe (CISPE), whose members include Amazon, EU antitrust inspectors are also investigating Microsoft's cloud computing practises.
The referral by Ofcom, according to Google Vice President Amit Zavery, showed the necessity of developing a free-floating cloud market without vendor lock-in.
"UK government agencies, businesses, and consumers want to move easily across cloud platforms and choose which services best meet their needs," he said, adding Google would continue to allow its products to run on any cloud without penalty.
By April 2025, the CMA will have finished its inquiry.

Christopher J. Mitchell

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