In a probe begun in October 2022, Ofcom finds Amazon, Microsoft, and Google may be harming UK cloud market competition and plans to refer the case to the CMA
Katharine Gemmell / Bloomberg :
Context & Ripple Effects
This is the escalation of a cloud-competition review Ofcom first announced in September 2022, when it identified cloud computing as a market requiring scrutiny. The regulator's finding turns that review into a potential CMA case focused on the UK's largest public-cloud suppliers.
The referral also established the path for the CMA's subsequent public-cloud provider investigation. Later coverage of CMA concerns over Microsoft's cloud licensing terms suggests that commercial terms, not just infrastructure scale, became a central competition issue.
First-order effects
- Amazon, Microsoft, and Google face a planned referral to the CMA, putting their UK cloud practices under competition-regulatory scrutiny.
- The CMA becomes the forum for assessing whether the providers' conduct is limiting competition, while UK cloud customers gain a formal regulatory channel for concerns about market choices and terms.
Second-order effects
- A CMA inquiry can force the three providers to defend pricing, switching, interoperability, and licensing practices, while smaller cloud suppliers can use the process to press their competitive claims.
- Enterprise buyers may gain leverage in cloud negotiations as the prospect of remedies raises the cost of practices that make workloads harder or more expensive to move.
Third-order effects
- The case points toward cloud competition being governed increasingly through the commercial rules layered on top of infrastructure, rather than assessed solely through providers' market share or technical capacity.
- If enforcement follows, the UK could become a testing ground for constraints on hyperscaler lock-in, with the eventual scope depending on the CMA's findings and remedies.
The trend: This is one data point in the shift toward regulators treating hyperscaler cloud terms and switching barriers as core competition infrastructure.