Amazon And Microsoft Cloud Services Allegedly Anti-Competition, UK Regulator Will Investigate!

Ofcom proposes to refer the cloud services market to the UK Competition and Markets Authority for further investigation. (photo: doc. pixabay)

JAKARTA - The UK communications regulator (Ofcom) is very concerned that Amazon and Microsoft could hurt competition in the market for cloud services.

In a statement, Ofcom proposed referring the cloud services market to the UK Competition and Markets Authority for further investigation.

If unchecked, Ofcom fears that concentration of cloud computing supply in the hands of a few large US companies could lead to UK customers paying more and smaller groups being pushed out of the market.

Previously, Ofcom itself conducted an investigation last October, so far it has uncovered several related practices, including those carried out by other largest technology companies in the world.

"High barriers to switch are already hurting competition in this fast-growing market. We think more in-depth oversight is needed to ensure it works well for the people and businesses that rely on these services," said Ofcom director who led the investigation, Fergal Farragher.

According to Ofcom, Amazon Web Services (AWS) and Microsoft Azure have a combined 60 percent to 70 percent share of the UK market in cloud services. Meanwhile, Google is their closest competitor with 5 percent to 10 percent.

"These are interim findings, and AWS will continue to work closely with Ofcom prior to publication of the final report," said an AWS spokesperson.

All three companies, Ofcom's preliminary findings, charge high fees to transfer data from the cloud, which discourages customers from switching providers or using multiple providers to best serve their needs.

In addition, technical restrictions imposed by leading providers prevent some services from one provider from working effectively with cloud services from other companies.

There are indications, ofcom, that this market feature has led to losses, with evidence of cloud customers facing significant price hikes when they come to renew contracts.

The UK Competition and Markets Authority received Ofcom's interim findings last week, and is currently reviewing them.

A Microsoft spokesperson said the company would continue to engage with Ofcom in its investigation. "We remain committed to ensuring the UK cloud industry remains competitive," he said.

Ofcom's request comes days after Google Cloud accused Microsoft of anti-competitive cloud computing practices.

Google Cloud Vice President Amit Zavery said the company had raised the issue with its antitrust agency and urged European Union (EU) antitrust regulators to take a closer look.

Currently, Ofcom has invited feedback on its proposal for further investigation and will publish a final decision on 5 October on whether to refer the cloud services market to the UK Competition and Markets Authority.

The European Digital Market Act will take effect from May, aimed at increasing competition in online services, as quoted by CNN International, Tuesday, April 11.

Likewise, the UK Digital Markets, Competition, and Consumer Bill, which aims to increase competition in online services, is expected to be put before lawmakers this year.