Written by 9:47 am Science & Technology Views: [tptn_views]

Microsoft and Amazon face UK regulator investigation over cloud services

The clouds are gathering over Microsoft’s Azure operations within the EU and now the UK, with the launch of a recent investigation into major cloud service providers that also includes Amazon. The UK’s Competition and Markets Authority (CMA) is nearly to wrap up its concerns over cloud gaming with Microsoft’s proposed Activision Blizzard acquisition, but it is going to soon turn its attention to Microsoft’s Azure cloud offerings and Amazon Web Services (AWS).

It’s a part of a fresh investigation into public cloud providers within the UK, after telecoms regulator Ofcom “identified a lot of features in the availability of cloud services that make it harder for patrons to change and use multiple cloud suppliers.”

Ofcom found issues with charges that cloud customers should pay to maneuver their data out of the cloud, discounts to only use one cloud provider, and technical barriers to switching between cloud providers. The CMA specifically calls out Microsoft, too. “Ofcom’s report also outlines concerns it has heard concerning the software licensing practices of some cloud providers, specifically Microsoft,” says the CMA in its press release today.

Telecoms regulator Ofcom found issues with cloud services within the UK

“The CMA’s independent inquiry group will now perform an investigation to find out whether competition on this market is working well and if not, what motion needs to be taken to deal with any issues it finds,” says Sarah Cardell, CEO of the CMA.

Although the CMA doesn’t specifically name Amazon, Ofcom’s market study identified that each Microsoft and Amazon control around 70-80 percent of the general public cloud infrastructure within the UK and that it was “particularly concerned concerning the practices of Amazon Web Services (AWS) and Microsoft due to their market position.”

Ofcom and the CMA aren’t alone of their concerns over cloud market competition, either. The Cloud Infrastructure Services Providers in Europe (CISPE) trade group, which incorporates Amazon, filed an antitrust grievance with the EU last yr. The group argues “Microsoft uses its dominance in productivity software to direct European customers to its own Azure cloud infrastructure to the detriment of European cloud infrastructure providers and users of IT services.”

Microsoft offered some licensing concessions greater than a yr ago, but they haven’t been enough to deal with the continuing complaints. Google even publicly called out Microsoft’s cloud software licensing “tax” earlier this yr, arguing that companies should pay extra after they wish to run software like Office on other cloud networks.

“Microsoft publicly touts that if you happen to run their software on Azure versus other vendors like AWS and GCP, it’s five times cheaper or it’s costlier to run on us, principally due to the tax customers should pay to Microsoft,” said Amit Zavery, head of platform at Google Cloud, in an interview with The Register earlier this yr. “The price of the products are the identical by way of infrastructure and all the things else, so the licensing cost is costlier due to using providers apart from Azure.”

The CMA’s market investigation could take 18 months to finish, with a statutory deadline set for April 4th, 2025. The UK regulator will outline theories of harm and any potential remedies that may address the situation. The UK regulator also has the ability to “impose structural remedies which might require corporations to sell parts of their business to enhance competition.”

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