Britain's competition regulator previously said it was considering requiring Microsoft to apply the same prices to its software regardless of which cloud it is hosted on.
Igor Golovniov | Sopa pictures | Lightrocket via Getty Images
LONDON – Britain's competition watchdog is preparing remedies to address competition issues in the multi-billion dollar cloud computing industry.
The Competition and Markets Authority will announce its interim decision detailing “behavioural” remedies against anti-competitive practices in the industry after a months-long investigation into the market, two sources familiar with the matter told CNBC.
The sources, who preferred to remain anonymous given the sensitive nature of the investigation, said the remedies in the cloud market could be announced within the next two weeks. The regulator had previously set a deadline of November to December 2024 to publish its preliminary decision.
A CMA spokesperson declined to comment when contacted by CNBC about the exact timing of its tentative decision.
Cloud infrastructure services is a market dominated by US technology giants Amazon And Microsoft. Amazon is the largest player in the market and offers cloud services through its Amazon Web Services (AWS) arm. Microsoft is the second largest provider and sells cloud products under its Microsoft Azure unit.
The history of the CMA investigation dates back to 2022, when Britain's telecoms regulator Ofcom launched a market study examining the dominance of cloud giants Amazon, Microsoft and Google. Ofcom then referred its cloud review to the CMA to address competition issues in the market.
Why is the CMA concerned?
Key issues the CMA is expected to address with recommended behavioral measures include so-called “egress” fees charged to companies for transferring data from one cloud to another, licensing fees deemed unfair, volume discounts and interoperability issues affecting the transfer make it difficult to switch providers.
According to one of the sources, there is a possibility that Google will be excluded from the scope of the antitrust remedies due to its smaller size compared to market leaders AWS and Microsoft Azure.
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 the remedies look like?
The CMA had already said in June that it was more interested in considering behavioral remedies to address its concerns, rather than “structural” remedies such as ordering disposals or separations of operations.
The regulator said in a working paper in June that it was “at an early stage” of considering possible remedies.
Solutions proposed at the time included imposing price controls that capped the amount of egress fees, removing technical barriers to switching cloud providers, and banning agreements designed to encourage companies to spend more in return for discounts make.
One controversial measure the regulator was considering was requiring Microsoft to apply the same prices to its software regardless of which cloud it is hosted on – a move that would have a significant impact on Microsoft's pricing structures .
CMA chief executive Sarah Cardell will speak at Chatham House, a British policy institute, on Thursday. In an interview with the Financial Times, she defended the regulator's track record in enforcing competition law amid criticism from Prime Minister Keir Starmer that the agency was holding back growth.
She is expected to outline plans for a review in 2025 into whether the CMA should use behavioral remedies more frequently when approving deals, the FT reported.
Comments are closed.