UK Targets Big Tech... MS and Amazon Under Investigation

"Big Tech Oligopoly Negatively Impacts Local Market Innovation and Competition"

UK competition authorities have decided to conduct an in-depth investigation into the US companies Amazon Web Services (AWS) and Microsoft (MS). This comes amid concerns that the oligopoly, with a market share of 70-80% in the cloud services market, is limiting innovation and growth.

According to major foreign media on the 5th (local time), the UK Competition and Markets Authority (CMA) will carry out an investigation into the UK public cloud infrastructure market. The investigation period is typically 18 months. The CMA explained, "The UK cloud market is worth ?7.5 billion (approximately 12.3 trillion KRW) and supports a variety of online services ranging from social media to AI-based models," adding, "Effective competition is necessary because many companies rely entirely on cloud services."

This investigation was initiated at the request of the media regulator Ofcom. Ofcom conducted a one-year investigation into concerns that major cloud service providers such as Amazon and MS are restricting innovation and growth. As a result, they stated they found evidence that these companies limit customers' choices. Ofcom pointed out issues such as the costs incurred when transferring data, difficulties in interoperability, and discount policies that encourage using only one provider, noting, "Some UK companies find it too complicated to switch cloud service providers or use multiple providers simultaneously." According to Ofcom, Amazon and MS account for about 70-80% of the UK public cloud infrastructure market. Google’s market share was also estimated to be around 5-10%.

Meanwhile, Amazon and MS have stated their intention to cooperate with the CMA’s investigation. However, Amazon rebutted, saying, "The Ofcom investigation results fundamentally misunderstand the functions, services, and discount methods in the IT sector," and warned, "Unfair intervention could unintentionally harm customers and market competition." MS stated it will strive to promote innovation and competition in the UK cloud industry.

Earlier, French competition authorities also expressed concerns about competition within the cloud market and indicated they might launch an investigation. The European Union (EU) competition authorities are also expected to investigate MS’s cloud business.