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UK Communications Watchdog Calls for Investigation into Microsoft and Amazon’s Cloud Market Dominance

The UK’s communications watchdog, Ofcom, has proposed referring Microsoft and Amazon to the Competition and Markets Authority (CMA) for further investigation into their dominance of the cloud computing market. Ofcom has expressed concern that the concentration of the cloud market in the hands of a few large US companies could lead to British customers paying more and smaller groups being squeezed out of the market.

Since October of last year, Ofcom has examined the cloud sector and found that cloud companies are making it difficult for customers to switch providers, use multiple providers, or allow their services to “interoperate” with other cloud groups. Amazon Web Services and Microsoft together control between 60 and 70 percent of the UK cloud market, with Google being the UK’s third-largest provider with a share of between 5 percent and 10 percent.

Ofcom has opened a consultation on its proposal and will decide whether to refer the case to the CMA by October 2023. Ofcom director Fergal Farragher said: “We’ve uncovered some concerning practices, including by some of the biggest tech firms in the world. High barriers to switching are already harming competition in what is a fast-growing market. We think more in-depth scrutiny is needed.”

Microsoft and Amazon have both responded to the call for further investigation. Amazon Web Services said: “We design our cloud services to give customers the freedom to build the solution that is right for them, with the technology of their choice.” Microsoft said: “We remain committed to ensuring the UK cloud industry stays highly competitive and to supporting the transformative potential of cloud technologies to help accelerate growth across the UK economy.”

The move comes as global regulators continue challenging the tech giants, investigating Microsoft’s $75bn acquisition of video games maker Activision and Amazon’s deal to buy Roomba-maker iRobot.

By CircleID Reporter

CircleID’s internal staff reporting on news tips and developing stories. Do you have information the professional Internet community should be aware of? Contact us.

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