The U.K. Competition Regulator Takes Aim at Cloud Computing Giants
In a move to address competition issues in the cloud computing industry, the U.K.’s Competition and Markets Authority is preparing remedies aimed at solving anti-competitive practices. The regulator is set to unveil its provisional decision detailing “behavioral” remedies within the next two weeks, following a thorough investigation into the market.
Cloud Dominance by Tech Giants
The cloud infrastructure services market is largely dominated by U.S. technology giants Amazon and Microsoft. Amazon leads the market with its Amazon Web Services (AWS) arm, while Microsoft follows as the second-largest provider with its Microsoft Azure unit. The Competition and Markets Authority’s probe into this market stems from a 2022 market study initiated by U.K. telecoms regulator Ofcom, examining the dominance of cloud giants Amazon, Microsoft, and Google.
Key Issues and Potential Remedies
Among the key issues the CMA is expected to address with recommended behavioral remedies are egress fees, unfair licensing fees, volume discounts, and interoperability issues. The regulator is considering measures such as price controls on egress fees, reducing barriers to switching cloud providers, and banning agreements that incentivize firms to spend more for discounts.
Potential Impact on Microsoft
One contentious measure being considered is requiring Microsoft to apply the same pricing for its software regardless of the cloud it’s hosted on. This move could have a significant impact on Microsoft’s pricing structures. CMA Chief Executive Sarah Cardell is expected to discuss these issues in a speech at Chatham House, outlining plans for a review in 2025 on the use of behavioral remedies in approving deals.
Looking Ahead
The Competition and Markets Authority’s efforts to address competition issues in the cloud computing industry reflect a broader push for fair and open markets. Stay tuned for further developments as the regulator unveils its provisional decision and potential remedies in the coming weeks. Could you please rewrite this sentence?
