Ofcom To Investigate Amazon, Microsoft Over Cloud Domination – Report

The UK is shaping up to make another regulatory probe into a commonly used technology segment – this time to do with cloud computing.

Reuters, citing two sources familiar with the matter reported that UK communications regulator Ofcom will this week push for an antitrust investigation into Amazon and Microsoft’s dominance of the UK’s cloud computing market.

The move should come as no surprise. In September 2022 Ofcom had announced it would “examine the position of Amazon, Microsoft and Google in cloud services,” as part of a “new programme of work to ensure that digital communications markets are working well for people and businesses in the UK.”

Cloud investigation

At the moment, the cloud services market is dominated by market leaders Amazon Web Services (AWS), Microsoft Azure, and to a lesser extend Google Cloud.

Indeed, those three “hyperscalers” together generate around 81 percent of revenues in the UK public cloud infrastructure services market, the UK regulator said last year.

Ofcom noted last year that the cloud has become an essential part of how products are delivered to telecoms users, as well as viewers and listeners of TV, radio and audio content, and said it would launch a market study under the Enterprise Act 2002 into the UK’s cloud sector.

Now according to Reuters, Amazon and Microsoft alone enjoy a combined market share of 60-70 percent of Britain’s cloud computing industry.

Meanwhile, their closest competitor, Alphabet’s Google has closer to 10 percent.

Ofcom’s push for an antitrust probe will remain in the body’s final report on the matter, set to be published on Thursday 5 October, one of the sources told Reuters.

Anti-competitive cloud?

The watchdog previously said it had considered referring the market for investigation by the CMA, the British competition regulator.

Ofcom warned the current state of Britain’s cloud computing market made it difficult for some existing customers to bargain for a good deal with their provider.

The regulator has previously cited technical restrictions and discounts encouraging customers to keep using a single provider for all their needs, even when better alternatives were available, which it felt could be considered anti-competitive.

Both Amazon and Microsoft previously said they would continue working with Ofcom ahead of the publication of its final report.