Sarah Cardell, the CEO of the UK’s Competition and Markets Authority (CMA), has kicked off a deep-dive investigation into Amazon and Microsoft.
They’re taking a closer look at how these tech giants might be dominating the cloud services scene, especially after Ofcom flagged some concerns. This all comes after a detailed look into the whopping £7.5 billion industry.
Amazon and Microsoft Business Practices
Earlier in April, Ofcom expressed apprehensions regarding the business practices of Amazon Web Services (AWS) and Microsoft on the internet, citing their dominant market positions. The two tech giants jointly accounted for a staggering 70-80% of the UK’s public cloud infrastructure services market in 2022, with Google trailing significantly at 5-10%.
Ofcom’s Fergal Farragher highlighted several issues, including high egress fees, technical challenges hindering interoperability and portability, and the offering of committed spend discounts by the so-called ‘hyperscalers’, Amazon and Microsoft.
What is going to happen now?
Recognizing the cloud sector’s critical importance to the UK’s economic landscape, Sarah Cardell accentuated the need for regulatory measures to curb excessive power accumulation. The CMA’s investigation aims to scrutinize potential anti-competitive impacts and to foster a competitive environment that maximizes benefits for all stakeholders.
This unfolding situation is set against a backdrop of notable global economic shifts, such as the resurgence of Asia-Pacific shares following a bond market downturn. Concurrently, the UK witnesses its long-term borrowing costs soar to a 25-year peak, while the US observes a marginal uptick in private sector unemployment claims.
