Britain’s competition regulator on Thursday said that Microsoft and Amazon are hurting competition in the cloud computing industry and called for a probe into their market dominance under the country’s strict new tech rules.
The Competition and Markets Authority said that market concentration and barriers to entry in the cloud services market have enabled both Microsoft and Amazon to hold “significant unilateral market power” and reap financial gain exceeding the cost of capital expenditure over a sustained period.
Tech giants like Amazon, Microsoft and Google have built huge businesses by offering access to computing resources — such as data storage and processing — via the internet using data centres, large facilities that contain dedicated hardware.
The CMA is concerned that certain practices within the space, such as egress fees and unfavourable licensing terms, are creating a “lock-in” effect where businesses are getting trapped into contractual agreements that are difficult to get out of.
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