Microsoft’s Azure operations in the EU and the UK face a new challenge as a new investigation cast a shadow over major cloud service providers, including Amazon.
The UK’s Competition and Markets Authority (CMA) is on the brink of concluding its concerns regarding cloud gaming and Microsoft’s proposed Activision Blizzard acquisition. However, it now turns its attention to Azure cloud offerings and Amazon Web Services (AWS) in a fresh investigation into public cloud providers within the UK.
The probe stems from the telecoms regulator Ofcom’s identification of various challenges associated with cloud services. Notably, the regulator highlighted obstacles that impede customers from switching providers and utilizing multiple cloud suppliers.
These obstacles include charges associated with data migration, discounts limited to single-cloud usage, and technical barriers to switching between providers. Specifically, the CMA targets Microsoft, referring to concerns about certain software licensing practices raised in Ofcom’s report.
The CMA’s independent inquiry group will now investigate to determine whether competition in this market is working well and if not, what action should be taken to address any issues it finds,” states Sarah Cardell, CEO of the CMA.
The concerns over competition in the cloud market extend beyond Ofcom and the CMA. The Cloud Infrastructure Services Providers in Europe (CISPE), which includes Amazon, previously filed an antitrust complaint with the EU. The trade group argues that Microsoft leverages its productivity software dominance to divert European customers towards its Azure cloud infrastructure, detrimentally impacting European cloud infrastructure providers and IT services users.
The CMA’s market investigation is expected to span 18 months, with a statutory deadline set for April 4th, 2025. During this period, the UK regulator will examine potential theories of harm and propose remedial actions to rectify the situation.
It is worth noting that the UK regulator possesses the authority to impose structural remedies and require companies to divest parts of their businesses to enhance competition.
As the investigation unfolds, the fate of Microsoft Azure operations and the cloud landscape in the UK hangs in the balance. The outcome will undoubtedly shape the future of cloud service providers and their practices within the country.