Antitrust Authorities to Investigate Competition in Cloud Computing by Amazon and Microsoft

The UK cloud computing market is under investigation by media watchdog Ofcom due to concerns over its domination by Amazon and Microsoft. Ofcom stated that these two companies make up 70-80% of the market, while the closest rival, Google, only has a 5-10% share. In April, Ofcom expressed worries about the lack of competition in the sector, which makes it difficult for businesses to switch providers. As a result, it has referred the market to the UK's Competition and Markets Authority (CMA) for further investigation. Cloud computing refers to the storage of data online that can be accessed from anywhere. Ofcom estimated that the UK's cloud services market was worth up to £7.5 billion in 2022. CMA Chief Executive Sarah Cardell emphasized the importance of competition in this market to ensure a fair playing field and unlock its full potential. The CMA will conduct an investigation to assess whether there are any competition issues and take appropriate action. The investigation is expected to conclude by April 2025. Ofcom's Consumer Protection Director, Fergal Farragher, explained that cloud computing is crucial for many digital services used by businesses and consumers daily. However, concerns have been raised about the lack of effective competition in the market, making it difficult for businesses to switch providers and utilize different services. Ofcom is particularly concerned about obstacles to switching, such as fees charged for data transfer, which may discourage users from choosing alternative services. Mr. Farragher suggested that these fees should be limited or eliminated. By referring the cloud services market to the CMA, Ofcom aims to ensure that it serves the best interests of UK consumers and businesses in the future. It is also important for rivals like IBM and Oracle to have the opportunity to challenge the dominant players in the market.