Microsoft and Amazon face UK regulator investigation over cloud providers

The clouds are gathering over Microsoft’s Azure operations within the EU and now the UK, with the launch of a brand new investigation into main cloud service suppliers that additionally contains Amazon. The UK’s Competitors and Markets Authority (CMA) is nearly to wrap up its considerations over cloud gaming with Microsoft’s proposed Activision Blizzard acquisition, however it’s going to quickly flip its consideration to Microsoft’s Azure cloud choices and Amazon Net Providers (AWS).

It’s a part of a contemporary investigation into public cloud suppliers within the UK, after telecoms regulator Ofcom “recognized plenty of options within the provide of cloud providers that make it harder for patrons to change and use a number of cloud suppliers.”

Ofcom discovered points with fees that cloud prospects should pay to maneuver their knowledge out of the cloud, reductions to solely use one cloud supplier, and technical boundaries to switching between cloud suppliers. The CMA particularly calls out Microsoft, too. “Ofcom’s report additionally outlines considerations it has heard concerning the software program licensing practices of some cloud suppliers, specifically Microsoft,” says the CMA in its press launch at this time.

“The CMA’s unbiased inquiry group will now perform an investigation to find out whether or not competitors on this market is working nicely and if not, what motion ought to be taken to handle any points it finds,” says Sarah Cardell, CEO of the CMA.

Though the CMA doesn’t particularly title Amazon, Ofcom’s market examine recognized that each Microsoft and Amazon management round 70-80 p.c of the general public cloud infrastructure within the UK and that it was “notably involved concerning the practices of Amazon Net Providers (AWS) and Microsoft due to their market place.”

Ofcom and the CMA aren’t alone of their considerations over cloud market competitors, both. The Cloud Infrastructure Providers Suppliers in Europe (CISPE) commerce group, which incorporates Amazon, filed an antitrust criticism with the EU final 12 months. The group argues “Microsoft makes use of its dominance in productiveness software program to direct European prospects to its personal Azure cloud infrastructure to the detriment of European cloud infrastructure suppliers and customers of IT providers.”

Microsoft provided some licensing concessions greater than a 12 months in the past, however they haven’t been sufficient to handle the continuing complaints. Google even publicly referred to as out Microsoft’s cloud software program licensing “tax” earlier this 12 months, arguing that companies should pay additional once they need to run software program like Workplace on different cloud networks.

“Microsoft publicly touts that in case you run their software program on Azure versus different distributors like AWS and GCP, it’s 5 instances cheaper or it’s dearer to run on us, mainly due to the tax prospects should pay to Microsoft,” mentioned Amit Zavery, head of platform at Google Cloud, in an interview with The Register earlier this 12 months. “The worth of the merchandise are the identical when it comes to infrastructure and the whole lot else, so the licensing price is dearer due to utilizing suppliers aside from Azure.”

The CMA’s market investigation may take 18 months to finish, with a statutory deadline set for April 4th, 2025. The UK regulator will define theories of hurt and any potential treatments which may handle the scenario. The UK regulator additionally has the ability to “impose structural treatments which may require firms to promote components of their enterprise to enhance competitors.”