The UK's Competition and Markets Authority (CMA) is investigating the cloud services market, revealing significant dominance by AWS and Microsoft, which hold 40-50% and 30-40% market shares respectively. The CMA's findings indicate that high market concentration coupled with substantial barriers to entry limits competition and customer choice, particularly harming alternative suppliers. Google, while a distant third in market share, has been notably excluded from the intense scrutiny aimed at AWS and Microsoft, underscoring the disparities in the cloud services landscape. The CMA's conclusion points to a severe lack of vigorous competition in the sector.
High levels of market concentration and barriers to entry have enabled AWS and Microsoft to hold significant unilateral market power, harming competition in the UK cloud services.
Is competition working? According to the CMA's provisional decision, the answer is a resounding no.
The cost of entry for rivals and integration risks restrict alternative cloud suppliers and limit customer choices.
We have provisionally found that Microsoft has the ability and incentive to partially foreclose AWS and Google using the relevant Microsoft software products.
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