UK regulator raises concerns, launches cloud competition investigation against Microsoft and Amazon

UK regulators have accused Microsoft and Amazon of unfairly limiting competition in the cloud services market. The preliminary findings from Ofcom’s market study into the sector suggest that these two “hyperscalers” charge significantly higher egress fees than most other providers and set technical restrictions that limit interoperability with other cloud providers. Ofcom also raised concerns about the use of committed spend discounts, which may incentivize customers to use a single hyperscaler for most of their cloud needs. The regulator proposed referring the case for further investigation by the Competition and Markets Authority (CMA), which will decide whether the matter requires a market investigation. The cloud infrastructure market is currently valued at £4.5 billion to £5.0 billion, with Microsoft and Amazon’s Amazon Web Services commanding a 60% to 70% share of the market.