Ofcom Recommends Antitrust Investigation into Amazon and Microsoft’s Dominance of UK Cloud Computing Market

British media regulator Ofcom is set to recommend an antitrust investigation into the dominance of Amazon and Microsoft in the UK’s cloud computing market, according to sources familiar with the matter. Ofcom’s final report, to be published on Thursday, will include the recommendation, which was initially issued in April. The two tech giants currently hold a combined market share of 60-70%, while their closest competitor, Google, has around 10%.

Ofcom has expressed concerns about the current state of the cloud computing market, stating that it makes it difficult for existing customers to negotiate better deals with their providers. The regulator believes that technical restrictions and discounts that encourage customers to stick with a single provider, even when better alternatives are available, could be considered anti-competitive.

The watchdog has also highlighted the potential impact on smaller cloud providers, as constraints on customers’ ability to use multiple providers could hinder their ability to compete with market leaders. Ofcom’s decision on whether to refer the market for investigation by the Competition and Markets Authority (CMA) will be announced by the statutory deadline on Thursday.

Both Amazon and Microsoft have previously stated their willingness to work with Ofcom. Microsoft, in its response to Ofcom’s earlier proposal, expressed concerns that an investigation could harm consumers and result in UK businesses and public sector customers having less competitive cloud solutions compared to their counterparts in the EU, the US, and China.

The CMA declined to comment on the matter. Ofcom’s decision could have significant implications for the future of the UK’s cloud computing market and the competitiveness of its industry players.