The UK’s cloud market will be investigated by competition authorities after communications watchdog Ofcom said it had uncovered “features that could limit competition” including “high fees for transferring data out.”
In its final 254-page report into the UK cloud market Ofcom today also warned over increasing cloud computing concentration. (AWS and Microsoft alone had a combined market share of 70-80% in 2022.)
Referring the market to competition regulator the CMA, Ofcom said: “High profitability, a concentrated market structure and limited levels of switching and integrated multi-cloud are likely indicators that cloud providers are not facing sufficiently strong competitive constraints."
An increasingly influential CMA will now conduct an independent investigation to decide whether there is an adverse effect on competition, and if so, whether it should take action or recommend others to take action.
AWS: We don't charge "egress fees"
Amazon had responded to an initial Ofcom report by saying it did not charge “egress fees” and that it was expensive building a large, highly resilient global network infrastructure and keeping it running with network utilisation “below 30%” (to ensure bandwidth is always available.)
It was fair, it said, that it recoups costs from this investment.
Google Cloud took the same view in its earlier response: “Our egress fees are reasonable charges for the use of our network infrastructure.