Following Ofcom’s referral, the CMA is launching a market investigation into the supply of public cloud infrastructure services in the UK
Ofcom has today referred the public cloud infrastructure services market to the Competition and Markets Authority (CMA) for an independent market investigation to further examine the market and consider whether there are competition concerns and, if so, what interventions can improve the supply of these important services for UK customers.
Cloud services allow remote access to computing resources on demand and over a network. They are being rapidly adopted by many businesses and have become an essential part of how many digital services are delivered to consumers. Ofcom has estimated that the market for cloud services in the UK was worth up to £7.5 billion in 2022.
In its market study, Ofcom identified a number of features in the supply of cloud services that make it more difficult for customers to switch and use multiple cloud suppliers.
The features which Ofcom is most concerned about are:
Ofcom’s report also outlines concerns it has heard about the software licensing practices of some cloud providers, in particular Microsoft.
Sarah Cardell, CEO of the CMA, said:
The CMA has appointed independent panel members to an inquiry group, who will act as the decision makers on this investigation. The group will publish an issues statement setting out the proposed focus of the CMA’s investigation shortly for consultation.
In its 2023 to 2024 Annual Plan, the CMA outlined its areas of focus for the next three years, which includes ensuring effective competition in digital markets as a priority. The CMA’s market investigation into cloud services will form an important part of its wider programme of work in digital markets including under the incoming Digital Markets, Competition and Consumer Bill.
The CMA will conclude its investigation by April 2025. For more information visit the Cloud Services Market Investigation case page.
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