The UK’s competition watchdog is pressing to go ahead with a formal investigation to determine whether it should have broader powers over US cloud giants Microsoft Azure and Amazon Web Services in order to remedy “harms to competition” identified by its cloud market probe.
The Competition and Markets Authority (CMA)’s recommendation comes as the EU’s failure to regulate the cloud market – mainly by not designating the two cloud giants (and also Google Cloud) as gatekeepers under the Digital Markets Act (DMA) – is testing politicians’ and lobbyists’ patience.
We recommend “to consider designating the two largest providers Microsoft and AWS with strategic market status (SMS) in relation to their respective digital activities in cloud services”, the CMA inquiry group’s market investigation document reads.
Under UK law, a company can be designated with SMS status if it has “substantial or entrenched market power” – similar to the EU’s DMA “gatekeeper” designation – granting competition authorities broad powers to intervene and impose remedies.
The two US giants in the CMA’s crosshairs aren’t happy about this prospect.
“The inquiry group’s final report disregards clear evidence of robust competition in the UK’s IT services industry,” an AWS spokesperson told Euractiv.
A Microsoft spokesperson offered a similar response, adding that the CMA’s recommendations “fail to cover Google, one of the fastest-growing cloud market participants.”
The CMA found that Microsoft and AWS each hold 30-40% of the UK’s Infrastructure-as-a-Service market, with Microsoft at 20-30% and AWS at 10-20% in Platform-as-a-Service.
Google was not recommended for tighter regulation due to its much lower market share – around 5% to 10%, per the document.
The CMA board will now decide whether to follow through with the recommendation for a “future designation investigation” into Azure and AWS.
(nl)
