Britain’s competition authority announced on Tuesday that it will reopen an investigation into Microsoft’s software-licensing practices within the cloud computing sector. This move comes months after the regulator initially decided not to take action following earlier findings. The Competition and Markets Authority (CMA) had previously identified that the dominance of Amazon and Microsoft was adversely affecting competition in cloud services, with Microsoft specifically criticized for its licensing strategies.
The CMA highlighted that Microsoft leverages its strong position in enterprise software products, including Windows Server and Microsoft 365, to restrict competition by imposing licensing fees when its services operate on rival cloud platforms. This approach has raised concerns about fair market practices and competition barriers.
In a broader context, antitrust regulators in both the European Union and the United States are also scrutinizing the cloud computing market. The CMA noted that following its earlier investigation, Amazon and Microsoft have taken significant steps to reduce certain fees associated with cloud services. Together, these two companies hold approximately 30-40% of the market share in cloud processing, storage, and networking, while Google accounts for a smaller share estimated between 5-10%.
The new CMA inquiry will focus on Microsoft’s business software ecosystem, aiming to designate the company with “strategic market status” in this area. This status would enable the regulator to implement targeted measures addressing software licensing concerns more effectively.
Sarah Cardell, CEO of the CMA, emphasized the regulator’s commitment to a “flexible, pragmatic approach” designed to achieve tangible results swiftly for UK customers. She remarked that cloud computing remains central to their strategy and acknowledged the progress made through engagement with Microsoft and Amazon to improve egress fees and interoperability. Cardell expressed expectations for further advancements from these companies in the coming months.
Microsoft responded by stating that the agreed changes focus on fees related to data movement, switching, and interoperability. Brad Smith, Microsoft’s vice chairman and president, affirmed that these adjustments support the CMA’s goal of enabling UK customers to confidently move, deploy, and manage workloads across different cloud platforms with greater ease and reduced friction.
Amazon also highlighted the measures it has implemented concerning multicloud adoption, data portability, and switching. The company described these steps as a formal commitment to enhancing customer choice in the cloud market.
