The UK’s Competition and Markets Authority (CMA) has sounded the alarm over what it describes as a troubling concentration of power in the cloud computing sector. According to a newly released report, Amazon Web Services (AWS) and Microsoft Azure, the top two players in the UK’s cloud infrastructure market, together hold a dominant 70–80% market share—far outpacing their nearest competitor, Google Cloud.

Allegations of Anti-Competitive Tactics

The CMA report highlights several allegedly anti-competitive practices that are creating barriers for smaller providers. These include "egress fees"—charges for transferring data out of cloud systems—along with restrictive software licensing and long-term contracts. These tactics, the CMA argues, not only discourage customers from switching providers but also insulate AWS and Azure from market pressures.

Customer Lock-In and Vendor Inflexibility

A central concern for the watchdog is the phenomenon of "vendor lock-in." Businesses that use these dominant cloud providers often face high costs and technical complexity when trying to migrate their data to a rival service. This lack of flexibility can significantly limit customer choice and reduce innovation in the market, the CMA warned.

Next Steps: Referral to Ofcom or Further Action

In response to the report, the CMA is considering a formal market investigation that could lead to significant regulatory interventions. This may include enforceable remedies to level the playing field for competitors, such as requiring clearer pricing structures or restricting certain licensing practices. The UK telecoms regulator Ofcom, which initially launched the cloud market review, has already referred the issue to the CMA for further scrutiny.

Global Implications Amid Broader Tech Crackdown

The UK’s concerns echo similar investigations in the EU and U.S., where regulators are also tightening the screws on Big Tech. As cloud computing becomes critical for everything from AI development to national security, the concentration of power in the hands of a few global firms is raising red flags across jurisdictions. The CMA emphasized that ensuring a competitive and innovative cloud market is essential for the UK’s digital economy and long-term technological resilience.