The Competition and Markets Authority (CMA) has published an issues statement setting out the proposed initial scope of its market investigation into cloud services, and potential remedies, should competition problems be found during its investigation.

While the issues statement is not part of the CMA’s official investigation and does not in itself entail that major players in the cloud market – namely Microsoft, Amazon, and Google – are undermining fair market practices, it does detail what the CMA is looking to investigate.

The market was initially referred to the CMA for an investigation by Ofcom following its own market study, which already identified features that make it difficult for UK business to switch and use multiple cloud providers.

Ofcom was particularly concerned about the position of Amazon and Microsoft as leaders in the £7.5 billion cloud services market in the UK.

The issues statement outlines the proposed initial scope of the CMA’s investigation, drawing on the three features of the market Ofcom was most concerned about plus the impact, if any, of software licensing practices on cloud competition.

The CMA is set to examine if technical barriers are making switching providers and multi-cloud difficult for customers and whether these barriers are contributing to the lock-in of customers to a single provider.

Further, they will also investigate whether egress fees act as a barrier to switching and multi-cloud, and if they contribute to unpredictable costs for customers or hinder competition, an issue highlighted by Ofcom’s report.

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Investigations will also investigate if discounts created by existing cloud providers are blocking entry and expansion among new and smaller companies, and if the software licensing practices dissuade customers from using rival providers.

“Cloud services are an essential part of how businesses in the UK operate and they underpin many aspects of our daily activities, from banking to communications,” Kip Meek, chair of the CMA’s inquiry group, said. “This is why effective competition in this market is so important.

“Following Ofcom’s market study, we’re proposing to focus our investigation on a number of issues that may be affecting cloud customers’ ability to switch between providers and make it harder for rival firms to enter the market. We welcome views on these issues as we get this investigation underway.”