British media regulator Ofcom is set to advocate for an antitrust investigation into the dominant positions of Amazon and Microsoft in the UK’s cloud computing market, as reported by two sources with knowledge of the situation.
Ofcom initially recommended this investigation in April, and it is expected that this recommendation will be retained in the final report, scheduled for publication on Thursday, according to one of the sources.
Combined, Amazon and Microsoft hold a substantial market share of 60% to 70%, leaving their closest competitor, Alphabet’s Google, with just around 10%.
Ofcom has previously indicated that it considered referring the cloud computing market to the Competition and Markets Authority (CMA), the UK’s competition regulator.
Ofcom expressed concerns about the current state of the UK’s cloud computing market, citing difficulties for existing customers in negotiating favorable deals with their providers. The regulator highlighted technical limitations and discounts that incentivize customers to stick with a single provider, even when better alternatives exist, which could potentially be seen as anti-competitive.
Ofcom’s report earlier this year stated, “We are concerned that constraints on customers’ ability to use more than one provider could make it harder for smaller cloud providers to win business and compete with the market leaders.”
Both Amazon and Microsoft have previously stated their commitment to cooperating with Ofcom ahead of the final report’s release. Microsoft, in particular, submitted a detailed 58-page response, arguing that an investigation could negatively impact consumers.
Microsoft emphasized that it would be unfortunate if UK businesses and public sector customers ended up with less competitive cloud solutions on the global stage compared to their counterparts in the EU, the US, and China.
At the time of this report, Amazon and Microsoft had not provided immediate responses to requests for comments.
A spokesperson for Ofcom confirmed, “We will be announcing our decision whether or not to refer the market to the CMA by the statutory deadline, which is Thursday, October 5.”
A spokesperson for the CMA declined to comment.