Concerns from regulators about the dominance of Amazon and Microsoft in Britain’s cloud computing market have triggered an investigation into the competitiveness of the key industry.
The U.K. communications regulator Ofcom said Thursday that its yearlong study of the cloud communications services market found features that could limit competition. British businesses face barriers when they try to switch or use multiple cloud suppliers, it said.
Cloud computing uses data centers around the world to store photos and emails or run software. It has become a vital service for many businesses, which turn to cloud providers to avoid the cost of buying expensive equipment and real estate to run their own data centers.
Ofcom asked the U.K. antitrust watchdog, the Competition and Markets Authority, to take a closer look at the 7.5 billion-pound ($9 billion) cloud market. The watchdog said it was opening an in-depth investigation that’s expected to wrap up by April 2025.
“Some U.K. businesses have told us they’re concerned about it being too difficult to switch or mix and match cloud provider, and it’s not clear that competition is working well,” Ofcom’s director responsible for the market study, Fergal Farragher, said in a press release. “So, we’re referring the market to the CMA for further scrutiny, to make sure business customers continue to benefit from cloud services.”
Ofcom said it was concerned about the position held by Amazon and Microsoft, which together account for 70% to 80% of the cloud market. Google trailed behind with 5% to 10% of the share, and smaller players make up the rest.
