Microsoft and Amazon have announced changes to cloud practices following a lengthy probe by the Competitions and Markets Authority (CMA), provoking mixed reactions from industry stakeholders.
While the regulator concluded in 2025 that both hold “positions of significant market power”, neither were given a Strategic Market Status (SMS) designation.
This is a label given to organizations that hold a disproportionate influence on markets and allows the CMA to impose “conduct requirements or introduce pro-competition interventions” under the Digital Markets, Competition, and Consumer Act (DMCC).
In the wake of the investigation, both hyperscalers have agreed to take action on key issues such as cloud egress fees, interoperability, and the ability of customers to switch providers.
In a statement, the CMA said this will “support greater choice” for businesses and public sector organizations across the country.
“These changes will reduce expense and effort for UK customers when using more than one cloud provider,” the regulator said.
As part of the announcement, the CMA revealed plans to launch a separate SMS probe into Microsoft’s software practices due to competition concerns. Expected to begin in May, the investigation will see the regulator examine the firm’s business software licensing practices.
In a blog post reacting to the cloud market decision, Microsoft president Brad Smith said the company is committed to working “quickly and constructively” to address the CMA’s concerns.
“We appreciate the opportunity we have had for direct and constructive conversations with the CMA and its staff and look forward to an ongoing dialogue in relation to relevant cloud issues in the future,” he wrote.
Amazon said it is working toward a “new UK Addendum that formalizes our commitment to customer choice through clear, comprehensive rights around multicloud adoption, data portability, and switching processes”.
Industry stakeholders aren’t sold
Experts have mixed reactions to Amazon and Microsoft’s moves to address issues flagged in the cloud market probe.
CCIA senior director Matthew Sinclair said the decision will avoid “overly broad and prescriptive interventions” that could harm UK cloud innovation.
“The regulator can focus its efforts on action to address specific issues, particularly restrictive software licensing terms for legacy software, which are costing UK users a fortune,” Sinclair noted.
Nicky Stewart, senior advisor at the Open Cloud Coalition, urged the regulator to take “swift action” against both organizations if they fail to meet commitments on egress fees and interoperability.
“Slow progress on these issues continues to hamper growth, innovation, and resilience in the UK cloud marketplace,” Stewart commented. “Decisive action will set a benchmark for competition authorities across Europe and beyond.”
In contrast, Mark Boost, CEO at UK-based cloud provider Civo, questioned whether the voluntary actions by both firms will deliver changes called for by industry stakeholders.
“Voluntary arrangements made with parties outside of the SMS framework will not provide real impact, and by delaying its final decision regarding Microsoft and excluding AWS altogether, there is a risk for CMA to unnecessarily prolong uncertainty and miss an opportunity to future-proof the UK’s digital infrastructure,” he said.
Boost added that the CMA’s decision does not provide “adequate solutions” to solve lingering concerns over the dominance of both hyperscalers in the UK market. Last year, the regulator found Amazon and Microsoft controlled a share of the market ranging between 30-40%.
“There needs to be a fair digital market in which domestic innovation is encouraged, alongside continuing to help build opportunities for international collaboration and trade,” he said.
“If the CMA is serious about delivering on this, it will need to adopt an integrated approach as opposed to only partially regulating these hyperscalers. If the same standards are not applied to both parties, the UK will jeopardize its objectives related to digital sovereignty and economic stability.”
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