The UK Competition and Markets Authority (CMA) has confirmed a delay in the publication of its provisional findings on cloud computing services, now expected in January 2025. Initially scheduled for December 2024, this update is part of a revised timeline, though the final report remains set for release in July 2025.
The investigation, prompted by concerns from communications regulator Ofcom, examines the competitiveness of the UK’s cloud services market. It focuses on public cloud infrastructure, where Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform dominate. Regulators are assessing whether their practices restrict customer choice and discourage multi-platform use.
An Ofcom study in 2023 flagged three main issues, which are data transfer fees, volume discounts, and contractual terms imposed by cloud providers. Data transfer fees, or egress charges, were identified as a significant barrier, making it costly for organisations to switch providers or adopt multiple platforms. Ofcom found that these fees were particularly high for AWS and Azure, raising concerns about fair competition.
The CMA hearings with Google, Microsoft, and AWS explored concerns over competition, licensing practices, and market power. Google criticised Microsoft’s restrictive licensing, arguing it hinders non-Azure providers like itself and AWS from competing effectively in the enterprise market. It claimed Microsoft’s licensing policies create technical dependencies through Azure and Active Directory.
Microsoft defended its practices, asserting that licensing fees do not harm competition and pointing to innovation in artificial intelligence (AI) and open-source tools as evidence of a dynamic market. AWS challenged claims that egress fees and committed spend agreements impede competition, highlighting the flexibility of multi-cloud strategies and the robustness of the market. All three underscored the growing importance of AI and the need for interoperability across platforms.
A key aspect of the CMA’s probe focuses on Microsoft’s licensing terms, particularly for products like Windows Server and Microsoft 365 when used on competing cloud platforms. Regulators are examining whether these practices create an uneven playing field by discouraging customers from choosing rival services.
“While we understand the need for careful consideration, the challenges facing the cloud sector remain pressing,” said Open Cloud Coalition senior advisor Nicky Stewart. “Anti-competitive practices continue to impact challenger providers, stifling innovation and limiting choice for businesses and consumers. We welcome the CMA’s commitment to addressing these critical issues and encourage it to deliver robust remedies that level the playing field, foster competition, and unlock greater opportunities for cloud innovation in the UK.”
Separately, Microsoft is facing legal action in the UK over its cloud licensing policies. A £1bn lawsuit filed by competition lawyer Maria Luisa Stasi at the Competition Appeal Tribunal alleges that Microsoft penalised businesses using rival cloud platforms by inflating licensing costs. The claim is on an “opt-out” basis, meaning all affected UK organisations are automatically included unless they choose to opt out. It seeks to compensate organisations affected by higher costs for relying on alternative providers like AWS, Google Cloud Platform, and Alibaba Cloud.
The CMA’s investigation builds on Ofcom’s finding that AWS and Azure account for 70–80% of the UK cloud infrastructure market, a significantly higher share than their global market presence of 54%, according to Synergy Research Group. Ofcom highlighted that the dominance of these providers, combined with high egress fees, limits competition by making it costly for businesses to switch providers or adopt multi-cloud strategies.
FTC investigation broadens regulatory pressure
Meanwhile, in the US, the Federal Trade Commission (FTC) has launched a wide-ranging antitrust investigation into Microsoft’s practices. The inquiry is reported to focus on licensing agreements, bundling strategies, and the integration of artificial intelligence tools into productivity software.
According to Reuters, the FTC’s inquiry, which began with informal discussions involving Microsoft’s competitors, has expanded into a formal investigation. Regulators are investigating whether restrictive licensing terms discourage customers from migrating data to rival platforms and whether bundling security and productivity software with Azure services harms competition.
Read more: US FTC launches antitrust probe into Microsoft’s cloud, AI, and licensing practices
