The UK’s Competition and Markets Authority (CMA) outlined the scope of its planned investigation into major public cloud platforms, singling out Amazon Web Services and Microsoft Azure over concerns that their business practices may be locking customers into using their services.
CMA announced plans for the investigation on Oct. 5, spurred by a report from Ofcom, the UK’s regulator for communications services, which found that “competition is being limited by market features that make it more difficult for customers to switch and use multiple suppliers.”
In its issues statement on Tuesday, CMA identified four hypotheses for scrutiny:
- The presence of technical barriers that may hinder customers’ ability to set up a multi-cloud architecture and switch cloud providers;
- The presence of fees connected with the transferring of data outside of a cloud provider’s infrastructure which may constitute a barrier to multicloud and switching. Ofcom calls these egress fees;
- The discounts offered by some cloud providers which are conditional on customers committing to a certain level of spend with them. Ofcom calls these committed spend discounts. These may increase barriers to multi cloud and switching;
- The software licensing practices by some cloud services providers which may reduce competition or raise barriers to entry.
We’ve contacted Microsoft and Amazon for comment on the CMA’s statement.
It’s the latest in a growing number of examples of regulators examining the potential for big tech companies to leverage their market power and acquisitions to give themselves an unfair advantage over rivals.
Separately, Microsoft was able to appease the CMA with concessions to close its record-setting acquisition of Activision-Blizzard last week, while Amazon is facing a landmark antitrust suit from the U.S. Federal Trade Commission over its online retail and marketplace practices.
Update: Here’s a statement from a Microsoft spokesperson: “We are committed to ensuring the UK cloud industry remains innovative, highly competitive and an accelerator for growth across the economy. We will engage constructively with the CMA as they conduct their Cloud Services Market Investigation.”
