31.07.2025 11:45

The UK's Competition and Markets Authority (CMA) has launched a comprehensive investigation into Microsoft and Amazon, alleging abuse of their dominant positions within the UK's cloud infrastructure market. This action, announced on Thursday, utilizes the nation's recently implemented digital regulations and follows concerns raised by the CMA regarding potentially anti-competitive practices.

Concerns center around the market-distorting effects of unfair contracts and pricing strategies employed by these tech giants, effectively locking businesses into long-term agreements. Microsoft and Amazon jointly control a substantial portion of the Infrastructure-as-a-Service (IaaS) market, estimated to be between 30% and 40%, leaving Google significantly behind with a market share of only 5% to 10%. This concentrated market power, the CMA argues, allows for excessive control over pricing and contract terms, stifling competition.

The CMA's investigation will leverage the UK's new digital laws to thoroughly scrutinize the cloud market's structure. The regulator highlights the substantial profits earned by Microsoft and Amazon, far exceeding their capital expenditures, as evidence of significant unilateral market power. CMA Chief Executive Sarah Cardell publicly stated that the current market structure is detrimental, hindering the growth and competitiveness of smaller players due to the commercial practices of the largest firms.

Specific practices under scrutiny include hefty egress fees, which penalize companies attempting to transfer data from the providers' cloud platforms. Additionally, the CMA criticizes restrictive contract terms that lock businesses into using a single provider, limiting flexibility and inhibiting switching to alternative services, even if more beneficial. These practices, the CMA asserts, are detrimental to the overall health and competitiveness of the UK's cloud computing sector.