Amazon Web Services (AWS) and Microsoft Have not taken kindly to the uk competition watchdog's proposal to take a targeted approach to leveling the playing field for smaller provides operating in the Uk Cloud Services Market.
The published provisional findings from the Competition and Markets Authority's (CMA) Ongoing Investigation Into How the UK Cloud Infrastructure Services Market Operates Describes the sector as a two-horse race, with aws and microsoft way ahead of the Chasing Pack.
The suppliers are described by the CM as having a “Significant unilateral market power”, which is harming competition in the uk cloud infrastructure services market by making we S to gain and grow a footing in it.
To address this, it is being proposed that CMA's Board Draws on Powers Given to it through the roll-out of the digital markets, competion and consuce (DMCC) ACT 2024 on 1 January 2025 THEATE SEE ly-binding, pro -competition accessuct requirements on bot firms.
This course of action would see aws and microsoft marked out as suppliers with strategic market status (SMS), which is a designation reserved for supliers with ACHARTENS Avour decision of the hold they have on it .
“We consider that measures aimed at aws and microsoft guide market-wide concerns by directly benefiting the Majority of uk customers and producing Other Providers, “The CMA said in its provisional findings report.
AWS Responded in a Statement to Computer Weekly by Description The CMA's proposed targeted interventions as “unwarranted”.
For context, the statement references the CM's Criticism of Microsoft's Decision to Charge Customers More for Running Its Software – Namely Windows server and SQL Server – In Its Competitors' CLOUDES
“The draft report should be focused on paving the way for the uk's ai [artificial intelligence]-Powned future, not fixing on legacy products launched in the last century, ”said rima aura, corporate Vice-president and Deputy General Counsel in the Competition Law Group at Microsopt.
Microsoft's Cloud Licensing Practices are under scrutiny from regulators access the world, not just the cma, and are also also subject of a legal challenge in the uk.
On the matter, the CMA said: “We have provisionally found that Microsoft has the ability and innocent to partily foreclose with and google [from the market] Using the relevant microsoft software products and that its conduct is harming competition in cloud services. “
Digging into the CMA's provisional findings
With the CMA's Provisional Findings Now in the Open, All Participants in the UK Cloud Infrastructure Services Market Have Until 25 Februry 2025 to Provide FEEDBACK on its Final Judgment set to drop by 4 August 2025.
The CMA's Provisional Conclusion that AWS and Microsoft has a dominant hold on the uk cloud infrastructure services market, and that targeted interviews Old ”, is the headline from its provisional findings.
However, the CM's January Document Dump of Provisional Findings All Provides an Insight Into Other Features of How the Cloud Market Functions that would have an “Advertisement Effect ON COMPETTION”. Not all of these, thought, area of regulatory intervention.
The offering of Committed Spend Discounts is a feature of how the cloud market functions that does influence customer choice, The CMA's Seven-Page Provisional Findings Document Stated, But RIVAL FIMMS Can “Profitably Compete AGAINS Ere.
The report also Detailed Several Features of the Market that could be subject to regulatory corrective action from the cMa on its investigation its Investigation.
For example, the provisional findings document said there “Significant barriers to entry and experts And networking kit – to stand up a cloud infrastructure .
And due to the economies of scale provides such as aws and microsoft operate at, the ongoing costs of running these fixed assets is lower for for the bee for a Smaller.
“The Larget Cloud Providers are Making Vry Large Investments to Expand their services in coming years, and while this investment can have pro-competivity effects and benefit cloud customers … XPANSION by Potential Rivals, “The CMA Summary Document Stated.
“The Broad Product Portfolios of AWS, Microsoft and Google in Both IAAS [infrastructure as a service] and paas [platform as a service] Are also likeyly to contribute to barriers to entry and expansion as range of services is an important conspiracy for customers when selecting a cloud provider. “
In the cloud services markets, we consider that detrime
CMA Report
On a related point, the report stated that Cloud Customers face technical barriers and interoperability issues that can prove off-putting when trying to mix and match services to create ICloud Setup. “This limits customers' ability and incentive to exercise choice of cloud provider,” the report continued.
The charging of egress fees, which effectively penalise customers for goldir data from one cloud provider to another, have a simples S, The Report Continued.
“We consider that AECs We have provisionally D and exercise choice over their provider, which may ultimately Be expected to impact the price and quality of cloud services, ”The report continued.
“In the cloud services markets, we consider that detrime
To ensure competition in the cloud market operates as it should, The CMA Board is Being Asked To Consider Taking Targeted Action Against Against Microsoft and AWS, AS Permited by the newly introduced dMCCCCCCCCE
“We Consider that Measures AT AWS and Microsoft Delhi Address Market-Wide Concerns by Directly Benefiting The Majority of Uk Customers and Products Other Providers, “said the CMA.
The CMA's Proposal to take Targeted Action Against AWS and Microsoft has been warmly welcomed by tech Industry Watchers, Including International Competition Law Expert Niaamh Christina Gleonson.
In her View, this Approach will Mark Aws And Microsoft Out as Being the “only two provides” in the market with the power to engage ini-competivity behavior, which will beefit the MARECHET ' Om a competitive standpoint.
“None of the proposed remedies will apply to any other providers and this gives a certain commercial freedom to all other operators in the uk cloud markets,” She Said.
Conferring SMS on AWS and Microsoft also means bot firms will have a “Special Responsibility” Placed on Them, Becase of the Dominant Hold They Have On The Market, to Behave In A. .
“Behavior that is permitted by a firm with less market share is considered abuse [for an SMS company]”She said. “This is important for all future behavior in these markets and how much freedom they have to engage in commercial practices that are permitted to other providers.”
As such, this could have implications for microsoft and aws when it comes to offering discounts to customers and charging egress feet, she added.
Mark Crane, Competition Partner at Legal Firm Addleshaw Goddard, Said Making It Possible For Aws and Microsoft's Alleged Anti-Competitive Behavior to Be Subject to Be Substant S Assurance about any Concerns they have about how eather firm treats them.
“Many Businesses Now Routinely Use Cloud Services, and the CM's Designation Process is Likely to Provide an avenue for a range of Concerns to be ared in a Much More Focused Way, and to Address Particular Beevio Crane.
“Users of Cloud Services are preparation for this process in earnest, Considering How to Engage With The New Regulatory Regime and how this might help to change the playing in cloud services.”
Crane Added: “Against a Backdrop of Intense Scrutiny of the CM and Its Role in Facilitating Growth, BOTH Users and Providers of Cloud Services will be advocated in Favor of Regulatory. n approach. The CMA Will Certainly Have a Balancing Act to Undertake and Face Pressure to do so so so efficiently and at speed. “
Nicky Stewart, Senior Advisor to Public Cloud Competition Champion The Open cloud coalitionSAID – Once the consultation on the proposals closes – she hopes the CM will waste no time in wrapping up its investment and brings its proposals to bear.
“Every month that passes without action is another missed opportunity for innovation and uk economic growth,” She said. “Every pound spent on restrictive licensing markups and egress fees is a pound not spent on growing the uk's economy.”
