Ofcom said it had received evidence that Microsoft had made it less attractive for customers to run their Office productivity applications on cloud infrastructure other than Microsoft Azure.
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LONDON – Britain’s competition watchdog is preparing remedies aimed at addressing competition concerns in the multi-billion pound cloud computing industry.
Two people familiar with the matter told CNBC that after months of market investigations, the Competition and Markets Authority will publish its interim decision detailing “conduct” remedies for anti-competitive behavior in the industry.
The sources, who spoke on condition of anonymity due to the sensitive nature of the investigation, said the cloud market’s remedies could be announced within the next two weeks. The regulator previously set a deadline of November to December 2024 for issuing an interim decision.
A CMA spokesperson declined to comment on the timing of its interim decision when asked by CNBC.
Cloud infrastructure services is a market dominated by U.S. tech giants Amazon and Microsoft. Amazon is the largest player in the market, providing cloud services through its Amazon Web Services (AWS) unit. Microsoft is the second-largest vendor, selling cloud products under its Microsoft Azure unit.
The CMA investigation dates back to 2022, when UK telecoms regulator Ofcom Start market research A look at cloud giants Amazon, Microsoft and Google. Ofcom subsequently Submitting its cloud review to the CMA to solve market competition problems.
Why is the CMA concerned?
Key issues the CMA expects to address through the proposed conduct remedies include charging companies so-called “egress” fees to transfer data from one cloud to another, licensing fees considered unfair, volume discounts and making things worse. More difficult interoperability issues.
One of the sources said that due to Google’s smaller size compared to market leaders AWS and Microsoft Azure, it is likely to be excluded from the scope of competitive remedies.
Amazon and Microsoft declined to comment for this story when contacted by CNBC. Google did not immediately respond to a request for comment.
What might a remedy look like?
The CMA previously said in June it would prefer to consider behavioral remedies to address its concerns rather than “structural” remedies such as ordering divestment or business separation.
The regulator said in a statement working papers June said consideration of potential remedies was still in the “early stages”.
Solutions proposed at the time included imposing price controls, limiting the level of egress fees, lowering technical barriers to switching cloud providers, and banning agreements that encourage companies to spend more in exchange for discounts.
One controversial measure being considered would require Microsoft to charge the same price for its productivity software products regardless of which cloud they are hosted on, a move that would have a significant impact on Microsoft’s pricing structure, regulators said.
CMA chief executive Sarah Cardell is due to speak at UK policy institute Chatham House on Thursday. in a interview Prime Minister Keir Starmer has teamed up with the Financial Times to defend the regulator’s record on competition enforcement as she criticizes it for holding back economic growth.
According to the Financial Times, she is expected to outline plans in 2025 to review whether the CMA should use behavioral remedies more frequently when approving transactions.
