AWS, Microsoft, and Google Under the Spotlight

<p>The UK's cloud market is a place of regulatory scrutiny these days as
the Competition and Markets Authority (CMA) launches a full-scale investigation
into the practices of major cloud infrastructure providers. </p><p>The probe is a response to concerns that these hyperscalers, including
Amazon's AWS, Microsoft, and Google, may hinder businesses' ability to switch
cloud providers or use multiple services. Given the recent accusations around <a href="https://www.financemagnates.com/trending/amazon-under-fire-ftc-and-17-states-unleash-legal-blitzkrieg/">Amazon’s
pricing habits</a>, is anyone really surprised? </p><p>The Egress Fee Dilemma and Interoperability Concerns</p><p>The investigation centers on practices such as "egress fees,"
non-transparent charges for transferring data out of a cloud provider's
ecosystem. This can deter businesses from switching providers. They’re
essentially a fee for ending your relationship. Much like an electronic divorce
payment. Additionally, the <a href="https://www.financemagnates.com/search-results/?searchPhrase=cma">CMA</a>
will scrutinize interoperability, where cloud services are designed to be
incompatible with rivals, making multi-cloud approaches challenging.</p><p>“Many businesses now completely rely on cloud services, making
effective competition in this market essential,” CMA CEO Sarah Cardell said in
a statement. “Strong competition ensures a level playing field so that market
power doesn’t end up in the hands of a few players — unlocking the full
potential of these rapidly evolving digital markets so that people, businesses,
and the UK economy can get the maximum benefits.”</p><blockquote><p lang="en" dir="ltr">Following Ofcom’s referral, we are investigating the supply of public cloud infrastructure services in the UK. Cloud services allow remote access to computing resources on demand and over a network. Read more: <a href="https://t.co/pOPX4F0Sn0">https://t.co/pOPX4F0Sn0</a> <a href="https://t.co/7k3ikWBlE6">pic.twitter.com/7k3ikWBlE6</a></p>— Competition &amp; Markets Authority (@CMAgovUK) <a href="https://twitter.com/CMAgovUK/status/1709815785869189189?ref_src=twsrc%5Etfw">October 5, 2023</a></blockquote><p>Competition and Market Dynamics</p><p>AWS and Microsoft, leaders in cloud revenue in the UK, face particular
scrutiny. Ofcom's initial findings suggested that as much as 80% of cloud
revenue was attributed to them, whatever the percentage, <a href="https://www.financemagnates.com/fintech/does-aws-limit-the-playing-field-for-cloud-services/">it’s
certainly a lot</a>. This isn’t so much a monopoly, it’s more like there’s only
two options in town. The investigation will also assess "committed spend
discounts," which may discourage businesses from adopting a multi-cloud
strategy. Essentially, you’re limited to two choices, and they’re, allegedly,
making life difficult if you want to use two providers or, heaven forbid, leave
them.</p><p>The Road Ahead</p><p>Microsoft's software licensing practices, related to its dominance in
business software, are under scrutiny, but <a href="https://www.ofcom.org.uk/home">Ofcom</a>, the UK regulator in charge of
all sorts of communications, including <a href="https://www.financemagnates.com/trending/uk-in-hardcore-crackdown-on-online-content/">internet
safety</a>, left it to the CMA to decide whether further investigation is
warranted. The CMA's final report will outline the areas of focus and is expected
in due course.</p><p>Industry Response and Final Verdict</p><p>The CMA aims to conclude the investigation by April 2025, providing
clarity on the regulatory landscape for cloud providers in the UK. AWS and
Microsoft have expressed willingness to cooperate. It seems like businesses
around the UK will be waiting for quite some time. </p>

This article was written by Louis Parks at www.financemagnates.com.