Cloud computing has always been marketed to enterprises as a more cost-effective way for companies to access the compute resources they need, because they only pay for what they use and can easily scale back how much they are using, based on demand.
Enterprises were encouraged, on the back of these benefits, to streamline their on-premise datacentres and start migrating the applications and workloads that resided in them to the public cloud.
In the early 2010s, it is fair to say that companies had a much wider choice of public cloud providers to entrust their data to, with (the technology firms formally known as) HP and Dell both having enterprise propositions in this space, alongside Rackspace and the likes of Microsoft, Google and Amazon Web Services (AWS).
Towards the latter half of that decade, HP, Dell and Rackspace (and a handful of others) had all bowed out of the public cloud race, with the rise of AWS often cited as a factor in their decisions to pivot their business models towards a mix of private and managed cloud services provision.
This, in turn, has paved the way for the cloud infrastructure market to become the three-horse race it is today, with AWS leading the charge, followed by Microsoft and Google Cloud.
According to data shared by global market watcher Synergy Research Group in early February 2024, AWS accounts for just under a third (31%) of the global cloud infrastructure services market, followed by Microsoft with 24% and Google Cloud with 11%.
With around two-thirds of an entire market dominated by just three players, it is perhaps unsurprising that the hold companies like AWS, Microsoft and Google have on the cloud infrastructure services market is coming under increased regulatory scrutiny in various markets across the world , and the UK is no different.
In September 2022, the communications regulator Ofcom launched year-long probe into the UK’s £15m cloud services market, with particular emphasis on the actions and activities of the market’s biggest players: AWS, Microsoft and Google.
The study’s aim, as outlined by Ofcom at the time, was to “assess the strength of the competition in cloud services and the position key companies hold in the market” under the terms of the Enterprise Act 2002, which is an act of Parliament concerned with preserving market competitiveness.
Halfway through its investigation, Ofcom published an interim report in April 2023 that singled out AWS and Microsoft, specifically, for engaging in anti-competitive behaviours that it claimed might financially disadvantage UK consumers and businesses.
The “behaviours” were serious enough for Ofcom to confirm it was consulting on whether to refer the UK cloud infrastructure services market to the Competition and Markets Authority (CMA).
This was in the wake of its investigation bringing to light evidence that users were being hampered in their ability to switch from one cloud provider to another or add additional ones to their roster of technology providers.
Despite opposition from both Amazon and Microsoft, Ofcom confirmed , at the time its final report into the UK cloud infrastructure services market dropped in October 2023 , that it would be referring the market to the CMA for a further anti-trust probe.
That investigation officially concluded on 31 July 2025, with the CMA initially publishing a summary of the conclusions it had reached about how competition works in the UK cloud infrastructure services market and what it proposes should be done to address the issues it uncovered.
Below, we take a look at how its investigation progressed, and what will happen now it has concluded.
Why did Ofcom refer the UK cloud services market to the CMA?
Ofcom published a full-year report that chronicled the findings of its 12-month investigation into the UK cloud infrastructure market in October 2023 that raised red flags about some anti-competitive behaviours it claimed AWS and Microsoft are both known to display. This is why the market was referred to the CMA.
These red flags included concerns about the fact cloud providers charge customers egress fees to transfer their data to a competitor’s environment, which Ofcom claimed could discourage users from switching between providers.
The report also flagged interoperability restrictions as being another matter of concern, as it means users often have to put additional effort into reconfiguring their data and applications to work in different cloud environments.
The offering of committed spend discounts, which Microsoft and AWS are both known to do to public sector users, was also raised as a red flag by Ofcom as it incentivises users to back a single cloud provider for all or most of their cloud needs, the regulator claimed.
Ofcom’s full-year report also devoted several pages to detailing concerns it had received about how Microsoft charges users more for running versions of its cloud products in its competitors’ hosting environments.
“The [licensing] concerns centre on the way Microsoft sells and licenses some of its software products used by businesses… these include the Windows operating system, Microsoft SQL Server and the Microsoft 365 productive suite,” the Ofcom report stated.
“We have received submissions that say Microsoft engages in several practices that make it less attractive for customers to use Microsoft’s licensed software products on the cloud infrastructure of rival providers compared to Microsoft Azure. The submissions allege that this limits their ability to compete for customers.”
What did the CMA investigation cover?
It was the CMA’s responsibility to fully investigate the anti-competitive behaviours flagged in the Ofcom report. As well as this, the CMA also had powers to intervene and roll out changes to how the likes of AWS and Microsoft behave to correct any anti-competitive behaviours its work brought to light.
Who oversaw the CMA investigation?
The CMA appointed an inquiry group to oversee the investigation on 5 October 2023. The group comprised four members: CMA inquiry chair Kip Meek, Robin Foster, Paul Hughes and Colleen Keck.
How long did the CMA investigation into AWS and Microsoft last?
The CMA’s investigation into the UK cloud infrastructure services market was initially due to run until April 2025, but in mid-September 2024 the organisation confirmed it would be extending the timeframe of its probe until August 2025.
In a statement published on the CMA website on 19 September 2024, the organisation confirmed it would not be possible to complete its investigation and publish its final report within the original timeline.
And while it had until 4 August 2025 to complete its investigation, the CMA stated that it wanted to conclude the probe “as soon as possible and in advance” of its new deadline, which it did on 31 July 2025.
The original investigation’s length had already raised eyebrows and was a great source of concern for UK cloud market stakeholders, who feared the initial 18-month timeline would pave the way for the companies under investigation to gain more share and influence at the expense of other, smaller providers.
On that point, since the CMA’s investigation started, AWS signed several cloud hosting deals with three different government departments that commenced on the same day (1 December 2023) that are valued at more than £800m. These deals are set to run for three years each, and remain in play now the CMA investigation has concluded.
What kind of interventions were the CMA expected to take?
The CMA could have banned cloud service providers from charging data egress fees, which Ofcom flagged as a problematic behaviour because it discourages cloud users from switching suppliers due to cost concerns.
Incidentally, in the wake of the CMA probe starting, Google Cloud announced that it was scrapping egress fees for all its customers in January 2024.
And AWS made a similar announcement on 5 March 2024, with its pledge to waive the charges associated with transferring data out to the internet when users want to migrate workloads from its public cloud infrastructure.
In a blog post, announcing the move, the company claimed more than 90% of its customers never incur fees when transferring data out of AWS, anyway, because the company already offers 100 gigabytes per month of free transfers from its datacentre regions to the internet.
“If you need more than 100 gigabytes of data transfer out per month while transitioning, you can contact AWS support to ask for free data transfer out to the internet charges for the additional data,” the post stated.
“It’s necessary to go through support because you make hundreds of millions of data transfers each day, and we generally do not know if the data transferred out to the internet is a normal part of your business or a one-time transfer as part of a switch to another cloud provider or on-premises,” the company added.
The AWS blog post made no reference to regulatory pressure being a factor in its decision to waive data egress fees, but did say the move is in keeping with its view that moving to the cloud should give users choice and flexibility.
“We believe this choice must include the one to migrate your data to another cloud provider or on-premises,” the post added.
And doing so will not require users to close their accounts with AWS or change their relationship with the company in anyway, it added.
Just over a week after AWS said it was scrapping data egress fees, Microsoft published a brief blog post confirming that it was doing the same.
“We support customer choice, including the choice to migrate your data away from Azure,” said the Microsoft blog post. “Azure now offers free egress for customers leaving Azure when taking their data out of the Azure infrastructure via the internet to switch to another cloud provider or an on-premises datacentre.”
Technical and interoperability barriers were also flagged by Ofcom as complicating the lives of enterprises that might want to mix and match cloud services from competing providers. Therefore, Ofcom said the CMA could address this by forcing the hyperscalers to be more transparent about how nicely (or not) their technologies play with their competitors’ offerings.
Was there any shift in behaviour from AWS and Microsoft during the course of the CMA investigation?
On the whole, it was business as usual for AWS and Microsoft. There was no let-up in Amazon’s use of committed spend discounts to lure in public sector customers, for example.
Despite the offering of discounted pricing being a key area of focus for the CMA’s inquiry, details emerged in December 2023 that AWS had quietly renewed the preferential pricing scheme it had in place with the UK government.
This pricing scheme, known as the One Government Value Agreement (OGVA), has already been used to call off several multimillion-pound contracts, including one valued at £450m with the UK Home Office, since its introduction in late 2023.
Where Microsoft is concerned, though, the company has moved to allay concerns about its “unfair” software licensing practices, where its cloud deployments are concerned, by entering discussions with a cloud trade body that has previously reported it for anti-competitive behaviour to the European Commission.
As reported by Computer Weekly in February 2024, Microsoft confirmed it had opened discussions with the Cloud Infrastructure Services Providers in Europe (CISPE) trade body with a view to resolving its concerns about how it charges more for customers opting to run their own software in its cloud.
Did the CMA release any interim findings from its work?
On 23 May 2024, the CMA published the first in a series of working papers, to give stakeholders an insight into the shape its investigation was taking at the time. The publications were released with the caveat that the working papers’ were not intended to give readers a steer on any provisional or final decisions the CMA could make.
The working papers included one examining the UK cloud market’s overall competitive landscape, along with others separately looking at how the charging of egress fees and the offering of committed spend discounts might impact which providers companies choose to use.
On 12 June 2024, the CMA followed up these publications with another working paper, focusing exclusively on looking into concerns raised about Microsoft’s alleged anti-competitive cloud licensing tactics, which include accusations that the software giant charges enterprises more for running its software in its competitors’ clouds. The company was similarly accused of charging customers more for opting to run software made by other IT providers in its Azure cloud.
In late January 2025, the CMA published a provisional report of its findings to-date, which revealed the regulator could be considering taking targeted action against AWS and Microsoft by leaning on powers given to it by the passing of the Digital Markets, Competition and Consumers Act 2024 at the start of the year.
These powers would allow the CMA to mark AWS and Microsoft out as suppliers with “strategic market status” (SMS), which means the regulator could impose legally binding conduct requirements or pro-competition interventions on both firms to limit and remedy the toll their activities have allegedly had on the market.
“We consider that measures aimed at AWS and Microsoft would address market-wide concerns by directly benefiting the majority of UK customers and producing wider, indirect effects by altering the competitive conditions or other providers,” the CMA said in its provisional findings report.
What was the response to the interim findings?
Microsoft did not take kindly to having its cloud licensing practices singled out for scrutiny by the CMA, and hit out at AWS and Google in its response to the claims that its tactics are driving up the cost of doing business for its rivals.
How it licenses its products for cloud users is an area it has come in for criticism and investigation from regulators in other countries, but the company is firmly of the view that its actions in this area are not negatively impacting AWS and Google.
What were the final results of the CMA’s investigation?
The CMA concluded its investigation into how competition within the UK cloud infrastructure market operates with the recommendation that Microsoft and AWS should be subject to targeted interventions to curb behaviours the watchdog claims are harming competition within the UK cloud infrastructure services market.
The recommendation featured in an eight-page summary document created by the CMA, with its contents very much in line with the watchdog’s provisional take on what action it thought should be taken to address the “significant unilateral market power” both providers wield within the UK market.
To this end, CMA said it has recommended that its board use its powers to mark AWS and Microsoft out as SMS suppliers. As confirmed in the document, the CMA board is expected to consider this recommendation in early 2026.
“This [action] would enable the CMA to impose targeted and bespoke interventions to address the concerns we have identified,” the CMA’s final report summary document stated.
These interventions could also be iteratively adapted in response to changing market conditions, and will be kept under review in case further investigations into the behaviour of AWS and Microsoft are required.
“Measures aimed at Microsoft and AWS would address market-wide concerns by directly benefiting most UK customers and producing wider indirect effects by altering the competitive conditions for other providers,” the summary document stated.
What was the response to the CMA’s final report?
Perhaps unsurprisingly, Microsoft and AWS did not like what the CMA had to say about how much hold they collectively have on the UK cloud services market.
Microsoft said the CMA “misses the mark” with its findings, and AWS accused the watchdog of disregarding “clear evidence of robust competition” in the UK cloud market before going on to describe the interventions it was proposing as “unwarranted”.
Elsewhere, though, the response from the wider UK cloud market was far more glowing, with various spokespeople telling Computer Weekly they were pleased at the prospect of AWS and Microsoft facing targeted action given “the alarming anti-competitive behaviour identified” in the report, as one industry stakeholder put it.
However, there remains a concern that – given the influential hold that the CMA has identified that Microsoft and AWS have on the market – action against them both needs to be started sooner rather than later. Especially as the CMA board is not due to consider if the two parties should be given SMS status until 2026 at the earliest.
