Ofcom, the UK’s media regulator, has urged the Competition and Markets Authority (CMA) to investigate the extensive control of the UK cloud market by US tech giants Amazon and Microsoft. The regulator asserts it has identified features that made it difficult for UK businesses to use multiple cloud suppliers.
Ofcom cited concerns about limited options for UK businesses in choosing cloud providers due to the dominance of Amazon Web Services (AWS) and Microsoft, which held a combined 70-80% market share in 2022.
Google was the closest competitor with just a 5-10% share. However, both Amazon and Microsoft have disagreed with Ofcom’s findings but are committed to working constructively with the CMA.
Ofcom, the UK’s media regulator, has taken a significant step in addressing concerns over the duopoly of Amazon and Microsoft in the country’s cloud services sector. Citing the challenges faced by UK businesses in utilizing multiple cloud suppliers, Ofcom formally requested an antitrust investigation by the CMA.
“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,”
said Ofcom.
Amazon Web Services (AWS) and Microsoft collectively controlled an overwhelming 70-80% share of the public cloud infrastructure services market in 2022, with Google as a distant competitor.
The investigation aims to determine whether this dominance adversely affects competition. The CMA is expected to complete its inquiry by April 2025. The move reflects growing concerns about the concentration of power in the cloud computing sector in the UK and across the European Union.
European Regulators Confront Big Tech
Other regulators across Europe are also taking proactive measures to counter the dominance of Big Tech companies, targeting market concentration and potential anti-competitive practices.
French regulators, as part of a wider European initiative, are taking steps to reduce the dominance of tech giants, with Nvidia being the recent target. The French competition authority (FCA) conducted a surprise raid on Nvidia, citing concerns about the company’s 84% market dominance in graphics processing units (GPUs), which are crucial for technologies like AI and cryptocurrency mining.
Google was also making a final effort to overturn a 2.42 billion euro EU antitrust fine related to alleged market abuse in its shopping service. The company argues that regulators failed to prove its practices were anti-competitive, emphasizing that treating competitors differently is a normal part of competition.
The legal battle, ongoing since 2017, has cost Google 8.25 billion euros in penalties so far. The European Commission contends that Google favored its services unfairly through algorithmic manipulation. The case is now with the Court of Justice of the European Union (CJEU), and a ruling is expected in the near future.
The dispute is part of broader regulatory efforts to address Google’s dominance, including the possibility of breaking up the company due to its strong market position in digital advertising.
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