UK Regulator Launches Cloud Market Investigation Amid Concerns on Practices of Amazon, Microsoft -- Update
By Kyle Morris
The U.K.'s Office of Communications said Wednesday that it is
proposing a cloud market investigation as a study by the regulator
has uncovered practices and features that could limit competition,
and that it is particularly concerned about the practices of Amazon
and Microsoft because of their dominant market position.
The regulator said competition could deteriorate further in a
critical digital market for the U.K. economy if left unaddressed.
High fees for transferring data out, committed spend discounts and
technical restrictions are making it hard for business customers to
switch cloud provider or use multiple providers, it said.
Areas for concern include egress fees, technical restrictions on
interoperability and committed spend discounts.
In the U.K., Amazon Web Services and Microsoft have a combined
market share of 60%-70% and Google is their closest competitor with
5%-10%, Ofcom said.
"We've done a deep dive into the digital backbone of our
economy, and uncovered some concerning practices, including by some
of the biggest tech firms in the world," Ofcom's director
responsible for the market study Fergal Farragher said. "High
barriers to switching are already harming competition in what is a
fast-growing market. We think more in-depth scrutiny is needed, to
make sure it's working well for people and businesses who rely on
these services," he added.
Ofcom said it has proposed to refer the cloud infrastructure
market to the Competition and Markets Authority to carry out an
"These are interim findings and AWS will continue to work with
Ofcom ahead of the publication of its final report," an Amazon Web
Services spokesperson said to The Wall Street Journal.
"We look forward to continuing our engagement with Ofcom on
their cloud services market study," a spokesperson for Microsoft
told the Journal. "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."
Feedback on the interim findings is being invited by May 17 and
Ofcom plans to publish a final report by no later than Oct. 5.
Write to Kyle Morris at email@example.com
(END) Dow Jones Newswires
April 05, 2023 05:44 ET (09:44 GMT)
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