Cloud giants could face a major crackdown in the UK over competition fears
Ofcom, Britain’s body for regulating the communications industry, has announced a proposal to launch an investigation into the UK cloud market over fears that Amazon Web Services (AWS), Microsoft Azure, and Google Cloud are following anti-competitive practices to dominate the space.
According to Ofcom, both AWS and Azure accounted for 30-40% of the UK cloud market each throughout 2021, with Google Cloud taking up a further 5-10% of customers, leaving just 20-30% remaining for all other rival companies combined.
The report details three key findings that would serve as a basis for an investigation if it were to go ahead, which Ofcom says will be announced by October 5.
Ofcom challenges UK cloud market
Egress fees were noted as one of the three restrictions typically representative of anti-competitive behavior, making it costly for customers to drop a service in favor of another. Another cost-related method employed by some companies has been committed spend discounts which incentivize users to sign up for multiple services under the same company, broadening the reach of anti-competitiveness.
Finally, Ofcom suggested that interoperability should be considered. Cloud companies typically work under their own set of configurations that make it difficult to swap companies without significant effort on the part of a paying customer.
Any investigation would be referred to the UK’s Competition and Markets Authority (CMA) for further analysis - a body that Ofcom said it would work closely with throughout the second half of its study.
This comes at a time when a similar antitrust story is unfolding in Europe, whereby OVHcloud, Aruba SpA, and the Danish Cloud Community have collectively urged the European Commission to investigate Microsoft’s unfair dominance.
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