Concerns about the dominance of Britain’s cloud technology market by Amazon and Microsoft have prompted an inquiry into competition in the sector.
British regulator Ofcom announced on Thursday that a year-long investigation into the telecommunications services market had found aspects that harmed competition. British companies face hurdles when trying to switch or combine services, he said.
Cloud technology is the storage of data, such as photos, emails, or software, on remote servers over the Internet. It has become an essential service for many businesses that manage their own data centers, avoiding the purchase of expensive equipment or real estate.
Ofcom has asked the UK’s antitrust regulator, the Competition and Markets Authority, to further examine the cloud technology market, which is worth about 7.5 billion pounds ($9 billion). The Commission has indicated that it will launch a full investigation, which is expected to conclude in April 2025.
“Some UK businesses have told us that it is becoming increasingly difficult to switch or merge suppliers, and it is not clear whether competition is working well,” Fergal Farragher, the Ofcom director responsible for the study, said in a press release. “Therefore, we have asked the Commission for further investigation to ensure that customers continue to benefit from cloud technology.”
Ofcom said it was appalled by the position of Amazon and Microsoft, which dominate between 70% and 80% of the market. Google owns 5% to 10%, and other companies split the rest.
Amazon Web Services, Amazon’s cloud technology arm, said it disagreed with Ofcom’s findings, saying it was “based on a fundamental misunderstanding of how the IT and technology industry works. And the services and discounts that exist”.
“The cloud has made it easier than ever to switch providers,” the company said in a statement.
Both the companies have said that they will cooperate constructively with the commission.
“We are committed to ensuring the UK cloud technology sector is innovative, competitive and driving economic growth,” Microsoft said in a statement.