Amazon (AMZN), Microsoft (MSFT), and Alphabet's Google (GOOGL) face an investigation into cloud services by the U.K. Competitions and Markets Authority, which said it's looking into whether big cloud services providers make it difficult for businesses to switch or use more than one provider.
Together, Amazon and Microsoft control 70% to 80% of the cloud infrastructure services market in the U.K., which was worth £7.0 billion ($8.5 billion) to £7.5 (billion ($9 billion) in 2022. Google (GOOGL) has a share of about 5% to 10%.
The investigation comes after a request from Ofcom, highlighting concerns that included egress fees or the expense of transferring data away from the cloud, discounts that incentivize customers to remain with their cloud provider, and technological hurdles for migration that hinder users from switching platforms or using multiple providers.
Amazon dismissed the concerns, saying they are "based on fundamental misconceptions about the IT sector."4 However, Amazon and Microsoft indicated they plan to work constructively with the CMA as it carries out the inquiry.5 The authority expects that its investigation will be concluded by April 2025.
French antitrust regulators are also looking into cloud services, amid concerns that practices in the industry may be restricting competition. The European Union's competition authorities are examining Microsoft's cloud computing activities after a complaint was filed by the Cloud Infrastructure Services Providers in Europe (CISPE), a trade association that counts Amazon among its members.
Amazon shares were close to 2% lower in early trading as of 10:50 a.m. ET on Thursday following the news, while shares of Microsoft and Google parent Alphabet were down 1%.