Amazon and Microsoft to face cloud computing competition probe

The UK's cloud computing market is to face a competition probe over concerns it is being dominated by Amazon and Microsoft.

Media watchdog Ofcom said the two make up 70-80% of the sector in the UK, while closest rival Google has 5-10%.

Ofcom had said in April it was worried a lack of competition made it difficult for businesses to switch providers.

It has referred the sector to the UK's Competition and Markets Authority (CMA) to look into the issue.

Amazon and Microsoft both told sources they would work with the CMA as it conducts its investigation. However, Amazon said it felt Ofcom's concerns were "based on a fundamental misconception" of the sector.

Cloud computing broadly refers to the storage of data online that can be accessed anywhere at any time.

It has become an essential bit of infrastructure for both businesses and individuals, and is how millions of people store large amounts of data, use software remotely, stream music and videos and play games.

It is sometimes described as using "other people's computers", vast networks of powerful machines stored in massive data centres around the world, and many of those belong to either Amazon or Microsoft.

The services are used by businesses across the UK, and Ofcom estimated that in 2022 the cloud services market in the UK was worth up to £7.5bn.

The CMA said it would conclude its investigation by April 2025.

The body has the power to force companies to change practices, block purchases or even sell off parts of their businesses if it feels there is a legitimate threat to the market.

Fergal Farragher, Ofcom's consumer protection director, told the BBC's Today programme that cloud computing was "the hidden plumbing that underpins many of the digital services that businesses and consumers use every day".

However, he said that Ofcom had concerns that competition was not working as well as it should be in the cloud computing market.