Ofcom said it had obtained evidence that Microsoft was making it less attractive for customers to run Office productivity apps on cloud infrastructure other than Microsoft Azure.
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LONDON — Britain’s competition regulator is preparing a remedy aimed at resolving competition issues in the multi-billion pound cloud computing industry.
After a months-long investigation into the market, the Competition and Markets Authority is set to issue an interim decision detailing “behavioral” remedies to address anti-competitive practices in the sector, two people familiar with the matter said. people told CNBC.
The people, who requested anonymity due to the sensitivity of the investigation, said a bailout for the cloud market could be announced within the next two weeks. The regulator had previously set a November-December 2024 deadline for publishing a preliminary decision.
A CMA spokesperson declined to comment on the timing of the tentative decision when contacted by CNBC.
Cloud infrastructure services are a market dominated by large US technology companies Amazon and microsoft. Amazon is the largest player in the market and offers cloud services through its Amazon Web Services (AWS) division. Microsoft is the second largest provider and sells cloud products through its Microsoft Azure division.
The history of the CMA investigation dates back to 2022. At the time, Britain’s telecommunications regulator Ofcom launched a market study looking into the advantages of Amazon, Microsoft and cloud giants. google. Ofcom then referred the cloud review to the CMA to address competition issues in the market.
Why is the CMA concerned?
Key issues that the CMA’s recommended behavioral remedies are expected to address include so-called “egress” fees that companies are charged to transfer data from one cloud to another, licensing fees that appear to be unfair; Issues include volume discounts and interoperability issues. To switch vendors.
Google could be excluded from competition relief because it is smaller than market leaders AWS and Microsoft Azure, one of the people said.
Amazon and Microsoft declined to comment on the matter when contacted by CNBC. Google did not immediately respond to a request for comment.
What is the treatment?
The CMA previously said in June that it would consider behavioral remedies, rather than “structural” remedies such as divestment or separation orders, to resolve concerns.
the watcher said: working paper In June, it said it was in the “early stages” of considering potential remedies.
Solutions that emerged at the time included introducing price controls to limit the level of egress fees, lowering technical barriers to switching cloud providers, and banning agreements that encourage companies to increase spending in exchange for discounts. Ta.
One controversial measure regulators have announced they are considering would require Microsoft to apply the same pricing to its productivity software products regardless of which cloud they are hosted on. This could have a significant impact on Microsoft’s pricing structure.
Sarah Cardell, chief executive of the CMA, is scheduled to speak at Chatham House, a British policy institute, on Thursday. in interview In an interview with the Financial Times, Chancellor Keir Starmer defended the regulator’s track record on competition enforcement amid criticism that the regulator is stifling growth.
He is expected to outline plans for the CMA to consider in 2025 whether behavioral remedies should be used more frequently when approving transactions, the FT reported.
