AWS and Microsoft, the leading cloud computing platforms, are likely facing a competition probe in the UK.
UK watchdog Ofcom has referred the matter to the Competition and Markets Authority (CMA) for review, according to CNBC. Of particular concern is the difficulty switching between cloud providers, with special emphasis on AWS and Microsoft Azure, since they dominate the market.
“Some UK businesses have told us they’re concerned about it being too difficult to switch or mix and match cloud provider, and it’s not clear that competition is working well,” said Ofcom director Fergal Farragher.
“So, we’re referring the market to the CMA for further scrutiny, to make sure business customers continue to benefit from cloud services.”
The two companies account for 60-70% of cloud spending, giving them tremendous influence over the cloud market. The CMA has already shown itself willing to take on Big Tech in the interests of competition, and addressing AWS and Microsoft’s position could be a big step toward leveling the cloud playing field.
“Many businesses now completely rely on cloud services, making effective competition in this market essential,” said Sarah Cardell, CEO of the CMA.
“Strong competition ensures a level playing field so that market power doesn’t end up in the hands of a few players – unlocking the full potential of these rapidly evolving digital markets so that people, businesses, and the UK economy can get the maximum benefits.”
The Coalition for Fair Software Licensing welcomed Ofcom’s decision.
“Unfair licensing warps competition in the cloud by limiting choice, interoperability, innovation, and cybersecurity,” said Executive Director Ryan Triplette in a statement to WPN. “The ripple effect of restrictive licensing is felt not only at the cloud infrastructure level but throughout the cloud stack.”
“We appreciate the significant attention that Ofcom made in its report to understand the effects of current software licensing practices – particularly those of Microsoft – on customer cloud adoption. We are encouraged that the Competition & Markets Authority recognizes the concerns that Ofcom has about software licensing, and we now urge them to continue expanding their purview and investigate the impact these restrictive practices have both on customers and competition.”