Ofcom Calls For Probe of Amazon & Microsoft’s UK Cloud Dominance

The British media regulator, Ofcom, is set to intensify its push for an antitrust investigation into the overwhelming dominance of Amazon and Microsoft in the United Kingdom’s cloud computing market, according to Reuters. This move comes as part of Ofcom’s ongoing efforts to address concerns related to market competition and consumer choice.

Ofcom’s renewed recommendation, initially put forth in April of this year, will find its place in the regulator’s imminent final report on this matter, scheduled for publication this Thursday, as revealed by one of the informed sources.

The data reflects a stark disparity in market share, with Amazon and Microsoft collectively holding an imposing 60-70% share of the UK cloud computing market. Meanwhile, their nearest rival, Alphabet’s Google, lags far behind, commanding only around 10% of the market. Ofcom had previously hinted at the possibility of referring the market for a comprehensive investigation to the Competition and Markets Authority (CMA), the UK’s competition regulator.

Read more: Ofcom Recommends Investigation Into UK’s Cloud Infrastructure Market

One of the primary concerns outlined by Ofcom is the current state of the British cloud computing landscape, which it asserts has created obstacles for existing customers to negotiate favorable deals with their cloud service providers.

Ofcom identifies technical limitations and enticements such as discounts that encourage customers to remain exclusively with a single provider for all their cloud computing needs, even when superior alternatives exist. Such practices could potentially be deemed anti-competitive, as outlined in a report earlier this year.

The report expressed these concerns in clear terms, stating, “We are concerned that constraints on customers’ ability to utilize more than one provider could impede the ability of smaller cloud service providers to secure contracts and compete effectively against the dominant market leaders.”

In response to Ofcom’s earlier proposal, both Amazon and Microsoft publicly committed to cooperating with the regulator as it embarked on its comprehensive review. Microsoft, in particular, submitted a comprehensive 58-page response, emphasizing its position that an investigation of this nature could ultimately be detrimental to consumers.

Source: Reuters