Microsoft makes it harder for users to switch to AWS or Google, says UK's regulator

The UK’s Competition and Market Authority (CMA) is now proposing an investigation into Microsoft’s dominance in cloud market, as well as Amazon Web Service (AWS).

The British regulators published provisional findings from its investigation into the £9 billion cloud services market, where both Microsoft and Amazon made up to 40% of the UK customer spend on cloud services. Barriers such as high capital investment and technical challenges have made it difficult for customers to switch providers.

“Microsoft is using its strong position in software to make it harder for AWS and Google to compete effectively for cloud customers that wish to use Microsoft software on the cloud,” the CMA argues.

And now, the CMA recommends using new powers under the Digital Markets, Competition, and Consumers Act 2024 to investigate and designate AWS and Microsoft for potential strategic market status (SMS). It will then consult on its findings before making a final decision by August 2025.

Earlier this year, the CMA also launched an investigation into Google Search under the new regime, which would assess whether Google holds SMS in search and search advertising.

Last year, Microsoft faced a $1.27 billion lawsuit in the UK, alleging that it overcharged customers using rival cloud platforms, including Amazon Web Services, Google Cloud, and Alibaba Cloud.

The lawsuit, filed by the Scott+Scott law firm, claims Microsoft imposes higher fees for licensing its Windows Server software on non-Azure platforms than when running it on its own Azure cloud service.