Microsoft and Amazon Web Services (AWS), the world’s two biggest cloud providers, are calling on Ofcom, the telecommunications regulator, to defer its recommendation to involve the Competition and Markets Authority (CMA) in its probe of the potential anti-competitive nature of the UK’s cloud infrastructure services market.
Back in May, Ofcom proposed to refer the UK cloud market for investigation into anti-competitive behaviour, saying that AWS and Microsoft are the leading providers of cloud infrastructure services in the UK.
Ofcom’s initial market study found features and practices they say make it more difficult for customers to switch or use multiple cloud suppliers – Amazon’s and Microsoft’s dominant positions in the industry has caused particular concerns.
Among these practices include egress fees for transferring data out of the cloud, restrictions on interoperability with different cloud providers, and committed spend discounts which drive customers away from better quality alternatives.
Ofcom worries that these restrictions and practices will drive down competition and make it more difficult for cloud users to access better quality services and the multicloud.
Each company released their own response to the Ofcom proposal – AWS’s is 14 pages in total, while Microsoft’s response runs for 58 pages.
AWS claims that Ofcom’s response was based on “fundamental misconceptions” on the IT and cloud landscape, and that interoperability is actually easier than ever.
Intervening with the current market would actually “dampen competition and impede innovation.”
However, according to AAG’s market share analysis, AWS has the largest share of cloud infrastructure market, at 33%. AWS, Microsoft Azure, and Google’s Cloud services together share 66% of the global cloud market.
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Microsoft’s response focused on how the UK could miss out on potential innovations and discounts for cloud services if providers have to take into account interoperability requirements.
Microsoft went so far as to say the UK could fall behind: “It would be a particularly unfortunate outcome if UK businesses and public sector customers faced less vibrant and competitive cloud solutions on a global stage than those available to their rivals in the EU, the US and China.”
Google, another major cloud provider, said the UK’s cloud competition is “generally working well.”
The company did, however, defend Ofcom’s stance on interoperability: “We share the wider industry’s concern that the unfair licensing practices and commercial strategies deployed by certain legacy on-premises IT providers are causing significant harm to the cloud sector and UK customers at this critical inflection point by creating commercial lock-ins.”





