Ofcom has referred the public cloud infrastructure services market to the Competition and Markets Authority for further investigation.
It follows a study into the market earlier this year, which identified features that make it more difficult for UK businesses to switch and use multiple cloud suppliers.
Ofcom says it is “particularly concerned” about market leaders Amazon and Microsoft that between them hold a 70% share of the market.
As an evolving market, Ofcom has looked at how the market is working today and how it might develop in the future to head off any future competition concerns.
An AWS Spokesperson said: “We disagree with Ofcom’s findings and believe they are based on a fundamental misconception of how the IT sector functions, and the services and discounts on offer.Only a small percentage of IT spend is in the cloud, and customers can meet their IT needs from any combination of on-premises hardware and software, managed or co-location services, and cloud services. AWS designs cloud services to give customers the freedom to choose technology that best suits their needs. UK companies, and the overall economy, benefit from robust competition among IT providers, and the cloud has made switching between providers easier than ever. Any unwarranted intervention could lead to unintended harm to IT customers and competition. AWS will work constructively with the CMA.”
CMA will now conduct an independent investigation to decide whether there is an adverse effect on competition, and if so, whether it should take action or recommend others to take action.
