UK Proposes Measures to Ensure Cloud Giants Play FairUK Proposes Measures to Ensure Cloud Giants Play Fair

The U.K. cloud services markets isn't working, according to findings from the country’s competition watchdog, the Competition and Markets Authority (CMA).

The CMA’s independent inquiry group just published provisional findings following a long-running investigation into the activities, primarily, of cloud giants Microsoft Azure and Amazon Web Services (AWS).

It has found that competition in the £9 billion (US $11.2 billion) U.K. cloud services market “is not working as well as it could be.” This, it said, is likely to be leading to “higher costs, less choice, less innovation and lower quality of service for businesses and organisations across the U.K. economy.”

The CMA singled out Microsoft for “using its strong position in software to make it harder for AWS and Google to compete effectively for cloud customers that wish to use Microsoft software on the cloud. This reduces the competitive challenge that AWS and Google can provide in cloud services and to Microsoft’s position.”

Separately, in December, Microsoft was accused of overcharging U.K. customers of rival cloud companies in a £1 billion (US $1.27 billion) lawsuit.

The inquiry group also found:

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The CMA believes these concerns make it harder for customers to switch cloud provider or use multiple clouds, which may ultimately impact the price and quality of cloud services.

CMA May Keep Investigating Microsoft, AWS Under New Powers

The inquiry group provisionally recommends that the CMA use its powers under the Digital Markets, Competition and Consumers Act 2024 (DMCCA) to consider whether to designate the two largest providers, AWS and Microsoft, with strategic market status (SMS).

This is a designation that would indicate the cloud giants hold substantial and entrenched market power within a specific digital activity. It allows the regulator to impose special conduct requirements on how they operate to ensure fair competition within the U.K. cloud market.

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These may include a range of measures to encourage appropriate technical standardization, reduce data transfer charges incurred in switching and multicloud and/or ensure fair licensing of software, it said.

“Cloud services underpin most business operations, providing vital infrastructure to businesses and organisations across the U.K. economy. Our provisional view is that competition in this market is not working as well as it could be. So, we propose that the CMA considers investigating the largest cloud service providers using its new digital markets powers,” said Kip Meek, chair of the CMA’s independent inquiry group.

CMA's Kip Meek

The inquiry group will consult on its provisional findings and recommendations before making a final decision by Aug. 4, 2025.