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    Home » Latest News » CMA told to expedite action against AWS and Microsoft to rebalance UK cloud market
    Latest News

    CMA told to expedite action against AWS and Microsoft to rebalance UK cloud market

    TeamBy TeamJuly 31, 2025No Comments7 Mins Read0 Views
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    CMA told to expedite action against AWS and Microsoft to rebalance UK cloud market
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    The Competition and Markets Authority (CMA) has recommended that Microsoft and Amazon Web Services (AWS) should face “targeted and bespoke” interventions to curb behaviours the watchdog has concluded are harming competition within the UK cloud infrastructure services market.

    The recommendation features in a summary document published by the UK competition watchdog that outlines the conclusions it has reached now its investigation into the inner workings of the UK cloud infrastructure services market, which began in October 2023, has ended.

    The eight-page document confirms the CMA will push ahead with its prior proposal that AWS and Microsoft should be subject to targeted remedies to restore competition within the cloud market.

    To this end, CMA said it has recommended that its board use powers conferred on it through the roll-out of the Digital Markets, Competition and Consumers Act 2024 (DMCCA) to mark AWS and Microsoft out as suppliers with “strategic market status” (SMS). As confirmed in the document, the CMA board is expected to consider this recommendation in early 2026.

    “This [action] would enable the CMA to impose targeted and bespoke interventions to address the concerns we have identified,” the CMA’s final report summary document stated.

    These interventions could also be iteratively adapted in response to changing market conditions, and will be kept under review in case further investigations into the behaviour of AWS and Microsoft are required.

    “Measures aimed at Microsoft and AWS would address market-wide concerns by directly benefiting most UK customers and producing wider indirect effects by altering the competitive conditions for other providers,” the summary document stated.

    CMA competition concerns identified

    The summary document goes on to outline the concerns the CMA has about the “significant unilateral market power” AWS and Microsoft wield within the UK cloud services market, which it claims make it harder for alternative providers to gain a foothold in it.

    “This harm is exacerbated by the features arriving from technical and commercial barriers to switching [providers] and multicloud,” the CMA report said. “These barriers lock customers into their initial choice of provider, which may not reflect their evolving needs and limit their ability to exercise choice of cloud provider. These barriers can restrict customers from responding to attractive offers or accessing innovative new services from another provider, leading to weaker competition between providers.”

    Microsoft’s controversial practice of charging IT buyers more for opting to run its software in its competitors’ cloud environments was also flagged as a concern by the CMA for “adversely impacting the competitiveness of AWS and Google in the supply of cloud services”.

    The report continued: “These licensing practices are a feature that, in combination with the other features we have identified, including Microsoft’s large and increasing market share, further restricts the already limited choice and attractiveness of alternative products and suppliers.”

    Overall, the CMA said it thinks better customer outcomes would ensue if cloud markets were more competitive: “These outcomes would include more consistently competitive prices, greater prevalence of switching and multi-cloud use, and potentially higher quality and innovation.”

    Microsoft and AWS react to CMA final thoughts

    The CMA’s final thoughts on the state of the UK cloud infrastructure services market have garnered a mixed bag of responses, with – perhaps unsurprisingly – AWS and Microsoft both taking umbrage with its conclusions.

    A Microsoft spokesperson said the CMA “misses the mark again” with its findings, and accused the organisation of ignoring the fact that the cloud market has “never been so dynamic and competitive” and that Google’s hold on the market is growing too.

    “Its recommendations fail to cover Google, one of the fastest-growing cloud market participants,” the spokesperson said. “Microsoft looks forward to working with the Digital Markets Unit toward an outcome that more accurately reflects the current competition in cloud that benefits UK customers.”

    A spokesperson for AWS shared a similar sentiment, stating the final report “disregards clear evidence of robust competition” in the UK cloud market: “The action proposed by the inquiry group is unwarranted and undermines the substantial investment and innovation that have already benefited hundreds of thousands of UK businesses.

    “It risks making the UK a global outlier at a time when businesses need regulatory predictability for the UK to maintain international competitiveness. We will continue to engage constructively with the CMA as they consider their next steps.”

    Meanwhile, Chris Lindsay, vice-president of customer engineering for Europe, Middle East and Africa (EMEA) at Google Cloud, described the report’s findings in far more glowing terms. “The conclusive finding that restrictive licensing harms cloud customers and competition is a watershed moment for the UK,” he said, before calling for the proposed interventions to be pushed through swiftly. “Swift action…is essential to ensure British businesses pay a fair price and to unleash choice, innovation and economic growth in the UK.”

    Nicky Stewart, senior adviser to the pro-cloud competition advocacy group, The Open Cloud Coalition, also called on the CMA to “move forward” with urgency in tackling AWS and Microsoft’s behaviour. “Given the alarming anti-competitive behaviour it has identified, the current plan to start this process in early 2026 is nowhere near sufficient,” said Stewart.  “The UK is falling further behind on its digital ambitions around growth and resilience every day we wait.”

    Mark Boost, CEO at UK-based cloud services provider Civo, said the summary report’s contents seem like a “gesture, rather than a reset”, with its recommendations nothing more than a retread “with softer edges” of the CMA’s provisional findings, released in January 2025.

    “The CMA has identified the same issues but failed to follow through with the urgency that the market needs,” he said. “The recommendation to refer AWS and Microsoft to the Digital Markets Unit [DMU] sounds strong, but without interim remedies or a clear timeline, it leaves dominant providers free to continue business as usual.”

    There is, however, still time for the CMA to strengthen these proposals before they are implemented, which must happen if the UK is to deliver on its digital ambitions, continued Boost.

    “Ministers regularly talk about becoming a global leader in AI, data, and digital innovation, [but] in practice, we’ve seen government procurement push further into hyperscaler territory, from the £500m HMRC cloud deal to new public sector partnerships with Google Cloud,” he said. “At a time when the UK wants to lead in AI, the digital economy and SME growth, a competitive and open cloud infrastructure is essential.”

    Owen Sayers, an independent security architect and data protection specialist with a long history of working in the public sector, said it is now a case of waiting to see if the CMA’s proposed interventions have the desired effect of rebalancing the marketplace.

    “Only time will tell, but the UK government has already made clear that they favour a minimal regulation landscape, so I don’t expect a sea change effect,” he told Computer Weekly. “The government also appears to have escaped direct rebuke from the CMA over their extensive use of both Microsoft and AWS, with no mention made of the contracts already in place that include heavy commitments of guaranteed future minimum spend of public funds.

    “What is clear, however, is regardless of any regulatory action, if the government don’t actively seek to redistribute [its load of cloud contracts] from the hyperscalers to more UK domestic cloud providers, this entire investigation will have been an expensive waste of public money driving no material change, or giving little benefits realisation.”

    This post is exclusively published on eduexpertisehub.com

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