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In a move aimed at fostering competition, British media regulator Ofcom has called upon the UK’s antitrust authority to launch an investigation into the overwhelming dominance of U.S. tech giants Amazon (NASDAQ: AMZN) and Microsoft (NASDAQ: MSFT) in the UK’s cloud market.
Dominance of Amazon and Microsoft in UK Regulator Market
Ofcom’s comprehensive study uncovered key aspects that hinder UK businesses from seamlessly transitioning between and utilizing multiple cloud service providers. Consequently, Ofcom has referred the matter to the Competition and Markets Authority (CMA) for an independent inquiry.
CMA to Conduct Independent Investigation
“The CMA will now conduct an independent investigation to decide whether there is an adverse effect on competition. And if so, whether it should take action or recommend others to take action,” stated Ofcom in a press release.
Earlier reports by Reuters had already indicated that Ofcom was gearing up to advocate for an antitrust investigation into Amazon and Microsoft’s control over the UK’s cloud computing sector. This information came from sources familiar with the matter.
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Ofcom’s Concerns About Amazon Web Services and Microsoft
Ofcom, which commenced its scrutiny of cloud services last year, expressed particular concerns in April regarding the business practices of Amazon Web Services (AWS) and Microsoft, driven by their dominant market positions. Consequently, it was decided to call upon the competition regulator to intervene.
Ofcom’s Market Study Director, Fergal Farragher, emphasized that UK businesses had expressed concerns about the complexities involved in switching cloud providers or creating a mix-and-match approach.
“So, we’re referring the market to the CMA for further scrutiny, to make sure business customers continue to benefit from cloud services,” Farragher added.
According to Ofcom’s findings, Amazon Web Services (AWS) and Microsoft jointly held an impressive 70% to 80% market share by revenue in the UK’s public cloud infrastructure services market in 2022. Google (NASDAQ: GOOGL) emerged as their closest competitor, holding a share of 5-10%, as per Ofcom’s assessment.
Disclaimer: Please note that this article serves solely for informational purposes. Thus, must not construe as financial advice. We advise readers to conduct thorough research and consult with financial professionals before making any investment decisions.
