The UK\u2019s cloud computing market is \u201cnot working well\u201d and conduct requirements should be considered for the sector\u2019s two main players, Microsoft and Amazon, according to the competition watchdog.<\/p>\n
The final report from an independent inquiry group of the Competition and Markets Authority (CMA) has found that Microsoft and Amazon Web Services (AWS) are hurting competition in the cloud computing sector.<\/p>\n
Microsoft came under particular fire, with the panel\u2019s report saying it has \u201csignificant market power\u201d with some of its software products.<\/p>\n
It raised concerns over the way Microsoft charges Amazon and Google to use its software, which it said is driving up costs.<\/p>\n
The report recommends that the CMA uses new powers to give Microsoft and AWS so-called strategic market status in order to \u201cremedy the harms to competition that we have found\u201d.<\/p>\n
\u201cThis would enable the CMA to impose targeted and bespoke interventions to address the concerns we have identified, including with respect to features where there are specification risks around the design of effective market interventions,\u201d according to the report.<\/p>\n
The CMA will now consider launching a probe into whether to hand them \u201cstrategic market status\u201d, but this would not start until 2026 as it focuses efforts on proposals announced last week to assign this status to Google and Apple over their mobile platforms.<\/p>\n
The panel found that a lack of competition in the \u00a39 billion cloud sector could be leading to higher costs, less choice and innovation, and a lower quality of services for businesses across the UK.<\/p>\n
AWS and Microsoft\u2019s Azure each have up to around a 40% share of consumer spend in the market, with Google lagging behind in third place.<\/p>\n
On Microsoft, the report said: \u201cMicrosoft\u2019s licensing practices are adversely impacting the competitiveness of AWS and Google in the supply of cloud services, particularly in competing for customers that purchase cloud services which use the relevant Microsoft software as an input.<\/p>\n
\u201cAs a result, Microsoft faces weaker competitive constraints from AWS and Google, its most significant competitors, which is reducing competition in cloud services markets.\u201d<\/p>\n
Annual results from Microsoft on Wednesday showed booming sales in its Azure cloud computing business, with revenues for the division surpassing 75 billion US dollars (\u00a357 billion) on an annual basis.<\/p>\n
A Microsoft spokesperson said: \u201cThe CMA panel\u2019s most recent publication misses the mark again, ignoring that the cloud market has never been so dynamic and competitive, with record investment and rapid, AI-driven changes.<\/p>\n
Story Continues <\/p>\n
\u201cIts recommendations fail to cover Google, one of the fastest-growing cloud market participants.<\/p>\n
\u201cMicrosoft looks forward to working with the digital markets unit toward an outcome that more accurately reflects the current competition in cloud that benefits UK customers.\u201d<\/p>\n
A spokesperson for AWS said the report \u201cdisregards clear evidence of robust competition in the UK\u2019s IT services industry\u201d.<\/p>\n
They added: \u201cThe action proposed by the inquiry group is unwarranted and undermines the substantial investment and innovation that have already benefited hundreds of thousands of UK businesses.<\/p>\n
\u201cIt risks making the UK a global outlier at a time when businesses need regulatory predictability for the UK to maintain international competitiveness.\u201d<\/p>\n
But Google welcomed the findings and called for \u201cswift action\u201d.<\/p>\n
Chris Lindsay, Google Cloud\u2019s vice president of customer engineering in the EMEA (Europe, the Middle East and Africa) region, said: \u201cThe conclusive finding that restrictive licensing harms cloud customers and competition is a watershed moment for the UK.<\/p>\n
\u201cSwift action from the (CMA\u2019s) Digital Markets Unit is essential to ensure British businesses pay a fair price and to unleash choice, innovation and economic growth in the UK.\u201d<\/p>\n
The Computer and Communications Industry Association (CCIA) cautioned there was a risk that the \u201coverly broad and prescriptive intervention\u201d recommended could hamper investment in the UK and access to new technology.<\/p>\n
Matthew Sinclair, CCIA UK senior director, said: \u201cIf the CMA goes ahead with these changes it would undermine the UK\u2019s competitiveness as business users here no longer get access to the latest cloud services.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"The UK\u2019s cloud computing market is \u201cnot working well\u201d and conduct requirements should be considered for the sector\u2019s…\n","protected":false},"author":3,"featured_media":109923,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[2431,6356,2429,4315,745,2722,252,158,67,132,68],"class_list":{"0":"post-109922","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-computing","8":"tag-amazon","9":"tag-amazon-web-services","10":"tag-cloud-computing","11":"tag-competition","12":"tag-computing","13":"tag-google","14":"tag-microsoft","15":"tag-technology","16":"tag-united-states","17":"tag-unitedstates","18":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/114952864520871784","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/109922","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=109922"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/109922\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/109923"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=109922"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=109922"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=109922"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}