CMA advised to expedite motion in opposition to AWS and Microsoft to rebalance UK cloud market
The Competitors and Markets Authority (CMA) has confirmed Microsoft and Amazon Internet Providers (AWS) will face “focused and bespoke” interventions to curb behaviours the watchdog has concluded are harming competitors throughout the UK cloud infrastructure companies market.
The affirmation options in a abstract doc printed by the UK competitors watchdog that outlines the conclusions it has reached now its investigation into the interior workings of the UK cloud infrastructure companies market, which started in October 2023, has ended.
The eight-page doc confirms the CMA will push forward with its prior proposal that AWS and Microsoft needs to be topic to focused cures to revive competitors throughout the cloud market.
To this finish, CMA mentioned it has really useful that its board use powers conferred on it by way of the roll-out of the Digital Markets, Competitors and Customers Act 2024 (DMCCA) to mark AWS and Microsoft out as suppliers with “strategic market standing” (SMS). As confirmed within the doc, the CMA board is anticipated to contemplate this suggestion in early 2026.
“This [action] would allow the CMA to impose focused and bespoke interventions to deal with the considerations we’ve recognized,” the CMA’s closing report abstract doc acknowledged.
These interventions is also iteratively tailored in response to altering market circumstances, and will likely be stored beneath evaluation in case additional investigations into the behaviour of AWS and Microsoft are required.
“Measures geared toward Microsoft and AWS would deal with market-wide considerations by instantly benefiting most UK prospects and producing wider oblique results by altering the aggressive circumstances for different suppliers,” the abstract doc acknowledged.
CMA competitors considerations recognized
The abstract doc goes on to stipulate the considerations the CMA has in regards to the “important unilateral market energy” AWS and Microsoft wield throughout the UK cloud companies market, which it claims make it tougher for various suppliers to realize a foothold in it.
“This hurt is exacerbated by the options arriving from technical and business limitations to switching [providers] and multicloud,” the CMA report mentioned. “These limitations lock prospects into their preliminary selection of supplier, which can not replicate their evolving wants and restrict their capacity to train selection of cloud supplier. These limitations can prohibit prospects from responding to enticing presents or accessing modern new companies from one other supplier, resulting in weaker competitors between suppliers.”
Microsoft’s controversial follow of charging IT patrons extra for opting to run its software program in its rivals’ cloud environments was additionally flagged as a priority by the CMA for “adversely impacting the competitiveness of AWS and Google within the provide of cloud companies”.
The report continued: “These licensing practices are a function that, together with the opposite options we’ve recognized, together with Microsoft’s massive and growing market share, additional restricts the already restricted selection and attractiveness of other merchandise and suppliers.”
General, the CMA mentioned it thinks higher buyer outcomes would ensue if cloud markets have been extra aggressive: “These outcomes would come with extra constantly aggressive costs, larger prevalence of switching and multi-cloud use, and doubtlessly larger high quality and innovation.”
Microsoft and AWS react to CMA closing ideas
The CMA’s closing ideas on the state of the UK cloud infrastructure companies market have garnered a combined bag of responses, with – maybe unsurprisingly – AWS and Microsoft each taking umbrage with its conclusions.
A Microsoft spokesperson mentioned the CMA “misses the mark once more” with its findings, and accused the organisation of ignoring the truth that the cloud market has “by no means been so dynamic and aggressive” and that Google’s maintain available on the market is rising too.
“Its suggestions fail to cowl Google, one of many fastest-growing cloud market contributors,” the spokesperson mentioned. “Microsoft seems ahead to working with the Digital Markets Unit towards an consequence that extra precisely displays the present competitors in cloud that advantages UK prospects.”
A spokesperson for AWS shared the same sentiment, stating the ultimate report “disregards clear proof of strong competitors” within the UK cloud market: “The motion proposed by the inquiry group is unwarranted and undermines the substantial funding and innovation which have already benefited lots of of 1000’s of UK companies.
“It dangers making the UK a world outlier at a time when companies want regulatory predictability for the UK to keep up worldwide competitiveness. We are going to proceed to have interaction constructively with the CMA as they contemplate their subsequent steps.”
In the meantime, Chris Lindsay, vice-president of buyer engineering for Europe, Center East and Africa (EMEA) at Google Cloud, described the report’s findings in much more glowing phrases. “The conclusive discovering that restrictive licensing harms cloud prospects and competitors is a watershed second for the UK,” he mentioned, earlier than calling for the proposed interventions to be pushed by way of swiftly. “Swift motion…is important to make sure British companies pay a good worth and to unleash selection, innovation and financial development within the UK.”
Nicky Stewart, senior adviser to the pro-cloud competitors advocacy group, The Open Cloud Coalition, additionally referred to as on the CMA to “transfer ahead” with urgency in tackling AWS and Microsoft’s behaviour. “Given the alarming anti-competitive behaviour it has recognized, the present plan to start out this course of in early 2026 is nowhere close to enough,” mentioned Stewart. “The UK is falling additional behind on its digital ambitions round development and resilience each day we wait.”
Mark Enhance, CEO at UK-based cloud companies supplier Civo, mentioned the abstract report’s contents seem to be a “gesture, relatively than a reset”, with its suggestions nothing greater than a retread “with softer edges” of the CMA’s provisional findings, launched in January 2025.
“The CMA has recognized the identical points however didn’t comply with by way of with the urgency that the market wants,” he mentioned. “The advice to refer AWS and Microsoft to the Digital Markets Unit [DMU] sounds sturdy, however with out interim cures or a transparent timeline, it leaves dominant suppliers free to proceed enterprise as typical.”
There may be, nevertheless, nonetheless time for the CMA to strengthen these proposals earlier than they’re carried out, which should occur if the UK is to ship on its digital ambitions, continued Enhance.
“Ministers commonly discuss turning into a world chief in AI, information, and digital innovation, [but] in follow, we’ve seen authorities procurement push additional into hyperscaler territory, from the £500m HMRC cloud deal to new public sector partnerships with Google Cloud,” he mentioned. “At a time when the UK desires to steer in AI, the digital financial system and SME development, a aggressive and open cloud infrastructure is important.”
Owen Sayers, an impartial safety architect and information safety specialist with a protracted historical past of working within the public sector, mentioned it’s now a case of ready to see if the CMA’s proposed interventions have the specified impact of rebalancing {the marketplace}.
“Solely time will inform, however the UK authorities has already made clear that they favour a minimal regulation panorama, so I don’t count on a sea change impact,” he advised Pc Weekly. “The federal government additionally seems to have escaped direct rebuke from the CMA over their in depth use of each Microsoft and AWS, with no point out product of the contracts already in place that embrace heavy commitments of assured future minimal spend of public funds.
“What is evident, nevertheless, is no matter any regulatory motion, if the federal government don’t actively search to redistribute [its load of cloud contracts] from the hyperscalers to extra UK home cloud suppliers, this whole investigation can have been an costly waste of public cash driving no materials change, or giving little advantages realisation.”
