Lede

Ofcom, the UK's media and communications regulator, is concerned that Amazon and Microsoft's dominant market position in cloud services could be harming competition.

Summary

• 

  Ofcom is proposing to refer the cloud services market to the Competition and Markets Authority for further investigation.
• Ofcom's own probe has uncovered "concerning practices" by some of the biggest tech firms in the world, including high barriers to switching, which are already harming competition in the fast-growing market.
• The Competition and Markets Authority said it is reviewing Ofcom's provisional findings and stands ready to carry out a market investigation into this area.
• Amazon Web Services and Microsoft's Azure have a combined UK market share of 60%-70% in cloud services, with Google as their closest competitor with 5%-10%.
• Ofcom said the three companies charged high "egress fees" for transferring data out of a cloud, which discourages customers from switching providers or using multiple providers to best serve their needs.
• It also flagged technical restrictions imposed by the leading providers that prevent some of the services of one provider working effectively with cloud services from other firms, and said that fee discounts were structured to incentivize customers to use a single provider for all or most of their cloud needs.
• There were indications that these market features were already causing harm, "with evidence of cloud customers facing significant price increases when they come to renew their contracts," Ofcom said.
• A Microsoft spokesperson said the company would continue to engage with Ofcom on its investigation.
• Ofcom has invited feedback on its interim findings and will publish a final decision by October 5 on whether to refer the cloud services market to the Competition and Markets Authority.