The shift to cloud computing was marketed as a cost-effective solution for businesses, allowing them to pay only for the resources they use and easily scale as needed. This led many enterprises to transition their on-premise data centers to public cloud services, with a variety of providers available in the early 2010s.
However, by the end of the decade, the market had consolidated, with AWS, Microsoft, and Google Cloud emerging as the dominant players. Concerns about anti-competitive practices led to an investigation by Ofcom, which ultimately referred the UK cloud services market to the CMA.
The CMA’s inquiry, overseen by an appointed group, will investigate the behaviors highlighted in the Ofcom report, such as data egress fees and interoperability restrictions. Possible interventions by the CMA could include prohibiting egress fees and increasing transparency among providers.
AWS and Microsoft have responded to regulatory pressure by waiving data egress fees for users switching providers, but concerns remain about the impact of committed spend discounts. The CMA’s investigation is ongoing, with interim findings providing insight into the competitive landscape and potential impacts of various pricing practices.