Why the CMA is delaying its cloud probe – and what it means for big tech

The UK’s Competition and Markets Authority (CMA) has postponed the release of its provisional findings in its cloud computing investigation, shifting the publication date to January 2025, with the final report now expected by July 2025. This delay highlights the growing complexity of examining competition in the fast-evolving cloud computing market, particularly as scrutiny of dominant technology companies intensifies worldwide.

The investigation was launched after Ofcom, the UK’s communications regulator, flagged concerns about anti-competitive practices in the cloud computing sector. Ofcom’s findings suggested that customers faced barriers such as high data transfer fees and restrictive volume discounts, which deterred them from switching providers or utilising multiple suppliers. The CMA’s probe zeroes in on market practices by leading cloud service providers, including Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform, which collectively hold a substantial share of the UK cloud computing market.

Cloud licensing practices under the microscope

The CMA’s inquiry also extends to software licensing practices, particularly those of Microsoft, which has faced criticism for policies perceived to favour its Azure platform over competitors. Reports suggest that licensing terms for Windows Server and Microsoft 365 products may unfairly disadvantage rival cloud providers. This issue has gained further traction following a legal claim in the UK alleging restrictive practices that could cost British businesses and organisations over £1 billion in damages.

International regulators have also taken note of Microsoft’s cloud practices. The U.S. Federal Trade Commission is conducting its own investigation into whether the company’s licensing terms constitute anti-competitive behaviour. Industry experts suggest these inquiries are part of a broader trend to rein in the dominance of technology giants in critical digital markets.

Implications of CMA’s delay

The CMA’s decision to delay its provisional findings indicates the complexity of the issues at hand. Analysts suggest that the authority is keen to ensure its conclusions are based on robust evidence, given the far-reaching implications of its decisions. Some industry voices, however, have raised concerns about the potential impact of regulatory uncertainty on investment in the UK’s tech sector.

A Microsoft spokesperson has argued that the cloud computing inquiry risks discouraging innovation and investment in the country. Similarly, some stakeholders believe the delay could slow down much-needed reforms to ensure fair competition. Despite these criticisms, experts agree that thorough scrutiny is essential to fostering a competitive and innovative cloud services landscape.

Global impact on the cloud sector

The CMA’s findings, once published, are expected to shape regulatory approaches not just in the UK but globally. As cloud computing becomes a backbone of digital infrastructure, ensuring fair access and competition in this market is critical. The investigation’s outcome could influence how regulators worldwide approach anti-competitive practices by major players, particularly in sectors like data storage, artificial intelligence, and enterprise software.

Expert analysis: Balancing regulation and innovation

Industry experts emphasise that regulatory efforts must strike a balance between curbing anti-competitive practices and supporting technological innovation. One analyst noted that the growing dependence on cloud computing services makes it imperative for regulators to establish clear rules that prevent market abuses without stifling growth. The CMA’s rigorous approach reflects the increasing sophistication required to regulate digital markets effectively.

The ongoing scrutiny of AWS, Microsoft, and Google underscores the growing regulatory pressure on technology giants to operate transparently and fairly. While the delay in the CMA’s findings may frustrate some stakeholders, it also provides an opportunity for a more comprehensive and impactful evaluation.