LONDON, UK: Ofcom, the UK communications regulator, has asked the Competition and Markets Authority (CMA) to investigate the public cloud infrastructure services market, after finding features that may limit competition and innovation.

Cloud computing, which uses remote data centres to provide businesses with software, storage and networking, is vital for many sectors of the UK economy. Ofcom launched a market study in October 2022 and published its interim findings in April 2023.

The study identified two dominant providers in the UK: Amazon Web Services (AWS) and Microsoft, which had a combined market share of 70-80% in 2022. Google was their closest competitor with a share of 5-10%.

Ofcom found that some features of the market, such as high egress fees, technical barriers to interoperability and portability, and committed spend discounts, could make it difficult for customers to switch or use multiple cloud providers. This could reduce their bargaining power and prevent them from accessing the best quality services.

Fergal Farragher, Ofcom’s Director responsible for the Market Study, said: “We’re referring the market to the CMA for further scrutiny, to make sure business customers continue to benefit from cloud services.”

The CMA will decide whether to launch a full investigation into the market within six months.