Key points:
- The chair of the UK’s cloud services inquiry, Kip Meek, resigned over the slow pace of regulatory action against Microsoft Azure and AWS.
- Cloud hosting companies say the dominance of AWS and Microsoft Azure limits innovation and drives up costs for customers.
- Regulators in the UK, US, and EU are now investigating the market, but progress has been slow, allowing big tech to strengthen its grip.
The UK’s competition watchdog is being criticized for delays in tackling the dominance of Amazon Web Services and Microsoft Azure in the cloud computing market. The resignation of Kip Meek—the chair of the Competition and Markets Authority’s (CMA) cloud services inquiry—has thrown the spotlight on how sluggish regulatory responses could be hurting businesses and innovation.
Meek stepped down as chair after voicing frustration that the CMA was taking too long to act on recommendations made more than a year ago. Changes in the cloud computing industry, he said, should be happening faster, given how influential these services have become across the economy.
Industry leaders across the Atlantic share the concern. David Terrar, CEO of the Tech Industry Forum, warned that "every month that goes by, the two big players get more entrenched." The US FTC is also investigating whether Microsoft holds an unfair advantage over smaller cloud competitors.
Nicky Stewart of the Open Cloud Coalition said the inquiry began in October 2022, but "three-and-a-half years later, nothing has changed." She stressed that AWS and Microsoft together control between 70% and 90% of the market, making it harder for other providers to offer truly competitive services. Worse yet, the CMA’s report noted customers in the UK are paying roughly £500 million more annually because of limited competition.
IDC analyst Dave McCarthy added that "diagnosing an uncompetitive market doesn’t help if the watchdog moves too slowly." He also pointed out that without potential enforcement actions, enterprise customers lose leverage in negotiations over things like data transfer fees.
The situation is being watched worldwide. Last November, the European Commission opened investigations under its Digital Markets Act to examine unfair competition in cloud computing, with an interim report expected this summer—potentially ahead of the UK.
"Everyone is waking up and smelling the coffee," said Stewart, noting regulatory action is now also underway in South America and South Africa. With the growing importance of AI—especially edge computing and agentic AI—rapid changes in how cloud services are regulated could have major impacts.
The CMA says a final decision on the cloud market could come by the end of this month, but insiders aren’t expecting swift or sweeping changes. For now, the big tech duopoly remains largely unchallenged, and that has both cloud suppliers and customers watching regulators closely.
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