UK Regulator Flags Anti-Competitive Practices in Cloud Market Dominated by AWS and Microsoft

The Competition and Markets Authority's provisional findings highlight barriers to competition and propose stricter oversight of the two largest cloud providers.

The UK's Competition and Markets Authority (CMA) has provisionally found that AWS and Microsoft dominate the £9 billion UK cloud market, with market shares of 40-50% and 30-40%, respectively.
The CMA identified significant barriers to competition, including high costs for rivals to enter the market and challenges for customers in switching providers due to egress fees and restrictive licensing practices.
Microsoft's software licensing practices were criticized for creating a 'lock-in' effect by charging higher fees for using its software on competitors' cloud platforms compared to its own Azure cloud.
The CMA proposed designating AWS and Microsoft with Strategic Market Status (SMS), allowing for regulatory interventions to address anti-competitive behavior under the Digital Markets, Competition and Consumers (DMCC) Act.
The final decision is expected later this year, with stakeholders like Google and smaller cloud providers supporting the findings, while AWS and Microsoft have expressed concerns over potential regulatory overreach.