The regulator has yet to act, despite confirming last year that Microsoft and Amazon Web Services hold a dominant position in the UK cloud services market.
The chairman of an inquiry into the cloud services market has resigned, citing ongoing delays in regulatory efforts to address market imbalances.
Businesses utilizing cloud services face significant challenges due to the market domination of Microsoft Azure and Amazon Web Services, a problem made worse by the UK’s Competition and Markets Authority (CMA)’s exceedingly slow response to the findings of its own investigation into the cloud sector.
Kip Meek, the inquiry’s chair, has now stepped down in protest over the lack of progress. This week, Meek informed the AI publication The Morning Intelligence, which initially broke the news of his departure, “I had concerns back then that the CMA was taking an excessive amount of time to implement our report’s recommendations. My worry about the slow pace persists.”
While the CMA’s purview is limited to UK markets, its investigation has garnered significant attention from regulatory bodies and industry associations globally, including the US Federal Trade Commission and various European counterparts.
Industry leaders across the Atlantic share worries about the slow response to this issue. “A ‘glacial pace’ is an apt description. With each passing month of inaction, the dominance of the two major players becomes more deeply rooted. It’s unfathomable why it takes nine months just to decide on a course of action; a solution remains distant,” said David Terrar, CEO of the Tech Industry Forum.
Concerns across the Atlantic
Nicky Stewart, senior adviser for the Open Cloud Coalition, also voiced her exasperation. She noted, “This entire process began in October 2022, when the cloud industry’s condition was brought to the CMA’s attention. We’re now three and a half years into this, with no tangible progress. Microsoft and AWS collectively retain a staggering 70% to 90% of the cloud market.”
She further stated, “The CMA’s report was remarkably thorough, offering a complete grasp of the industry’s dynamics. We’ve long been subjected to anti-competitive practices.”
Similar worries have surfaced in the United States. “Kip Meek’s departure underscores a harsh truth: identifying issues within a potentially flawed, highly concentrated cloud market serves no purpose if the regulatory body fails to act with urgency. Presently, hyperscalers continue their operations as usual, while the CMA appears to be stalling,” said Dave McCarthy, research vice president at IDC.
Worldwide regulators are presently scrutinizing the cloud market. Just last month, the US Federal Trade Commission initiated an investigation into Microsoft’s market standing and potential anti-competitive advantages over other cloud providers. Furthermore, in November of the previous year, the European Commission launched three market inquiries concerning cloud computing services under the Digital Markets Act (DMA), assessing if the DMA can effectively address practices that might restrict competition and fairness in the EU’s cloud computing industry.”
Stewart drew attention to the European Commission’s actions, stating, “The commission initiated three probes last autumn, with an interim report expected in May or June. They might very well conclude their work before the CMA, despite starting three years later.”
Terrar stressed the urgency of a swift resolution, considering AI’s growing significance in the current market and the essential role of competitive cloud services in enabling it. He commented, “AI, especially agentic AI, is poised to transform the cloud market. We anticipate shifts, such as increased edge processing, and cloud infrastructure remains foundational to today’s industry.”
Stewart also pointed out the financial implications: “A footnote in the CMA report indicated that the UK is overpaying approximately £500 million for cloud services due to the major players’ dominance, underscoring the necessity for greater competition.”
Sluggish Regulatory Action
McCarthy further emphasized the consequences for businesses: “This regulatory sluggishness has clear repercussions for enterprise users. Without an imminent threat of intervention regarding egress fees or restrictive software licensing, customers lose their ability to negotiate effectively.”
Evidence suggests a shift in global governmental attitudes. “It’s not solely Europe and the US taking action against these dominant entities; governments in South America and South Africa are also conducting investigations. Awareness is growing,”
The CMA has stated a cloud decision will be reached by month’s end. However, many in the industry are not anticipating swift changes.
This content was originally published by Networkhttps://www.networkworld.com/article/4141107/lack-of-regulatory-action-on-hyperscaler-dominance-prompts-inquiry-chair-to-quit.html World.
