The Competition and Markets Authority (CMA) has received a four-month extension to complete its investigation into the UK public cloud infrastructure services market, as it requires additional time to explore Microsoft’s licensing practices.
Initiated in October 2023, the investigation was originally set to conclude by April 4, 2025. However, the CMA announced on its website that it could not finalize the investigation and publish its report by that date. Following the provisions of the Enterprise Act 2002, the inquiry team has been granted an extension to wrap up its investigation by August 4, 2024, though the CMA aims to finish the process sooner, ahead of the new deadline.
This investigation focuses on whether the conduct of major cloud providers, including Amazon Web Services (AWS) and Microsoft, hampers competition in the UK cloud infrastructure market. The CMA is specifically looking into issues such as the offering of committed spend discounts, data egress fees, and interoperability challenges between various public cloud platforms, all of which could hinder customers from easily switching providers.
Additionally, the CMA is investigating complaints regarding Microsoft’s cloud licensing practices, which have previously led the company to be accused of overcharging customers for using its software on competing cloud platforms.
The CMA’s inquiry was prompted by a study conducted by the communications regulator Ofcom, which identified potential anti-competitive behavior by AWS and Microsoft. Ofcom subsequently referred the matter to the CMA for further investigation in October 2023.
In its announcement regarding the extension, the CMA highlighted the “complexity” of the “theories of harm” it is investigating, particularly with respect to Microsoft’s licensing practices. The CMA noted that the issue of licensing was not thoroughly examined in Ofcom’s initial market study. Furthermore, the inquiry has received additional evidence and submissions beyond the submission deadline, necessitating further analysis and interaction with the key stakeholders involved.
Microsoft’s licensing practices have faced ongoing scrutiny, drawing attention from technology trade groups, regulators, and competition authorities in various regions. The extension news coincided with the CMA’s release of summary evidence presented by AWS, Google, and Microsoft during separate hearings, where each company was able to respond to the points raised in the investigation. Regarding its licensing behavior, Microsoft stated in its July hearing that its practices are not negatively affecting AWS or Google, citing the strong financial performance of both companies.