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Google, Microsoft, and Amazon’s AWS are reportedly pointing the finger at each other as the United Kingdom’s market watchdog investigates whether the cloud operators have an unfair advantage in the field.
All three tech giants are being probed by the UK’s Competition and Markets Authority (CMA), who are looking into factors such as licensing practices and egress fees. There has been widespread criticism from customers who claim that it is technically complex and expensive to change providers. Egress fees are when customers are charged to extract their data from the cloud.
Last October, the CMA announced the launch of an investigation into the local cloud services market, following a recommendation from the telecoms regulator Ofcom. Ofcom’s own report suggested that the cloud market was not operating as expected.
Why are Google, AWS, and Microsoft blaming each other over their UK cloud market dominance?
According to the hearing, Google claims that AWS and Microsoft are “by far the most powerful players.” It suggested that Microsoft’s software licensing practices are “significantly impeding customer choice,” adding that these restrictions “risk irreversibly tilting the market in Microsoft’s favor at a pivotal moment.”
Microsoft Azure and AWS reportedly own a combined 60 to 70 percent of the British cloud market, with Google a distant third on a share of 5 to 10 percent. That said, it still had a global revenue of $10.35 billion in a single quarter this year.
Microsoft has disputed the claims, saying that the Alphabet-owned company was among the three cloud providers at the “hyperscale level”. It added that although Google’s Cloud Platform had not enjoyed the same level of success as AWS and Azure to-date, “it has important unique competitive advantages.”
The company stated that its software license fees do not materially increase costs for competitors, noting that available evidence shows AWS and Google have sufficient margins to compete with its Azure platform. However, Google argued that running Microsoft workloads on Google Cloud is more expensive than on Azure.
Meanwhile, AWS backed Google’s viewpoint, saying that “there is a history of cloud providers and customers being unhappy with Microsoft’s conduct.” The firm added asserted that Microsoft’s conduct is “artificially imposed and could be easily fixed.”
Despite the companies showcasing the shortcomings of their competitors, none of the three major companies are eager for significant regulatory intervention in the UK cloud market. Together, they control roughly two-thirds of the sector, leaving limited space for competition from smaller players.
In the coming months, the CMA is expected to issue a provisional decision, with a final ruling due before the April 2025 deadline.
Featured image: Ideogram
