The UK’s Competition and Market Authority has published the preliminary findings of an investigation into all cloud service providers in the country, following the concerns raised by telecommunications regulator OfCom.

The current conclusion is that the Cloud Services market is “Not to work as well as it could,” Since it is difficult for customers to call cloud suppliers or use several clouds. Lack of competition probably leads to higher costs, less choice, less innovation and lower quality services.

“The ability of British businesses to put a healthy pressure on cloud suppliers to offer better transactions CMA said in a press release.

4 Important concerns about the British Cloud Service Market

In his investigation, the CMA’s independent research group found four primary problems:

1. Cloud customers have a limited choice of suppliers and are unaware that several suppliers can offer the same services.
2. Technical and commercial obstacles make it difficult to switch over cloud suppliers or use multiple clouds, leading to the inclusion of the seller.
3. It is difficult for new suppliers to enter the market and compete because of the very large capital investment needed to provide cloud services.
4. Microsoft makes it more difficult for competitors, such as Google and Amazon Web Services, to compete for customers who want to use Microsoft software on the cloud.

Microsoft and AWS each have part of up to 40% of British customer spending on cloud services, which significantly dominate the market; The third largest supplier, Google, has a much smaller share. Even if the dominant players end up with just 5%too much, it could cost British businesses £ 430m a year, according to the CMA.

The investigation comes on the heels of a 2023 Report released by OfCom in which the regulator has identified a variety of issues that bother the cloud services market that provides implications for businesses and consumers. The CMA has investigated exit costs, technical barriers and expenses for the recommendation of the COM recommendation, but has for the time being found that only the former two damage competition.

A decision on whether these preliminary findings and recommendations should final will be taken by August 4, 2025.

AWS and Microsoft may be subject to the new digital markets, competition and consumers

The research group behind the investigation recommended that the CMA consider giving AWS and Microsoft “Strategic Market Status” under the New Digital Markets Act, Competition and Consumers, which came into effect on 1 January 2025. The law is specifically designed to regulate the behavior of large digital firms with significant market power in the UK

The CMA is investigating businesses that expect it to be strategic market status. If companies get that designation, regulators will set up the behavioral requirements to follow, which prevent the competitive practices. The research group said that the regulation of AWS and Microsoft under the DMCCA will enable it to take a ‘targeted and flexible approach to remedies’ and ‘better provisions for continuing monitoring and supervision.’

Perform requirements for the dominant cloud services providers, can encourage technical standardization, reduce costs for transferring data incurred in the switching of suppliers or the use of multiple clouds, and ensure the fair licensing of software.

Investigations whether Google and Apple should receive SMS directions continue. Both companies are being considered regarding their mobile ecosystems. Google is also being investigated in search and search advertising services.

See: UK regulator investigates Apple’s mobile browser dominance

Operational Response to the CMA’s investigation

Daniel Tremayne-Pitter, CEO of Dark Matter, a British technology research business, responded to the CMA’s step to investigate the British cloud service market, emphasizing the need to democratize the cloud computing market.

He said: “Even without identifying competitive practices, I believe that there is a significant need to democratize the wool computer landscape. Namely because of resilience. Academics, sustainability experts, clouds and now, even regulators around the world, acknowledge that the power and intelligence that has a small number of suppliers are going on. “

Microsoft and Amazon responds to OfCom’s recording

In response to OfCom’s Cloud Market Survey, Amazon and Microsoft published long answers. Here are short excerpts from the answers.

Amazon offered a counter -perspective. ‘We disagree with the concerns raised in the interim report that’ dedicated expenses’ can dampen competition by encouraging customers to use a single supplier for most or all of their cloud needs, or that we need to be of customers increase to increase the amount of them by negotiating their negotiations of their agreements, ”the company said. “AWS prices are listed in public on our website, and any customer can use our services just as much or as little as they need at these listed prices.”

Microsoft’s reply read: ‘Azure does not use’ customers’ on a price, while competing for new ones, not least because this dichotomy is false. There is also no realistic possibility that Microsoft or any other cloud seller could delay their rapid rate of innovation profitably due to the check-in effects. “

But Tremayne-Pitter had a different opinion with the argument that “almost every technologist” describes “lock-in” as a very real risk factor. “

He said: ‘The exit costs to move data out of the cloud are usually disproportionate to the’ free ‘nature to place it there in the first place. On a severe volume, it can make cost-presenting to even consider moving it. Cloud suppliers’ own tools are readily consumed by ambitious and innovative organizations; However, if your application or business critical workload is delivered by these own tools, you are nowhere to move unless you can save the time and expenses to develop your application in another environment. ‘

CMA’s investigation may have profound implications

The British Cloud Service Market has experienced tremendous growth over the past few years and is projected to reach $ 82.87 billion by 2029. However, with the CMA deleting deep into the activities in the British public cloud market, the result can have significant consequences for various stakeholders, including business owners, cloud service providers and the broader British business environment.

If the CMA examination leads to regulatory changes that promote fair competition, businesses can make more informed decisions about their cloud service providers, reducing the risk of unexpected costs or the inclusion of sellers. A more competitive cloud service market can also lead to a greater variety of options, which encourages providers to offer customized services that meet different business needs.

Although the outcome of the investigation can force cloud suppliers to adjust their pricing models, licensing agreements and data migration processes, and also create opportunities for new players to enter the market, there is a number of concerns. One is that cloud service providers may have greater compliance costs related to compliance with new regulations and adjusting their business models. These additional expenses may be communicated to clients.

Similarly, regulatory changes and increased competition in the Cloud Services market may require business owners to enter into transitional costs for migrant data, applications and processes to different cloud suppliers or adapt to new pricing structures. These costs can affect the budgets and resources.

A further concern is that government -supported fair competition measures can push the profit margins for established cloud suppliers. In response, these cloud providers may need to consider cost -saving measures or adjustments in their pricing strategies and reduce the quality of their services to create a balance between business costs and profits.

Depending on how the investigation comes out, the UK’s business environment may experience more economic growth or be considered hostile. If the CMA comes up with measures that will ensure more competitive prices and flexible licensing models, it can reduce business spending and encourage more businesses to accelerate their digital transformation efforts.

However, rapid changes in regulations and maintenance actions can create uncertainty for businesses that work in the UK, affecting their long -term planning and investment decisions. The UK’s reputation as a technical friendly and innovative pivot can also be challenged, affecting the attractiveness of technical enterprises and investors.

Franklin Oxke contributed to this article.