United Kingdom: Competition and Markets Authority issued final decision in its investigation into cloud services market

On 31 July 2025, the Competition and Markets Authority (CMA) issued its final decision in the market investigation into public cloud infrastructure services (IaaS and PaaS) in the UK and European Economic Area (EEA). The CMA concluded that certain features of the market may restrict competition, including high levels of market concentration, particularly the market positions of Microsoft and Amazon Web Services (AWS), as well as commercial and technical factors that may limit customer switching and the use of multiple providers. The CMA also examined the impact of Microsoft’s software licensing terms on the ability of other providers to compete. In 2024, Microsoft and AWS were each estimated to hold 30–40% of the IaaS market, while Google’s share in both IaaS and PaaS was estimated at 5–10%. The CMA found that factors such as egress fees, interface differences, limited availability of transferable skills, and committed spend agreements may make it more difficult for customers to switch providers. It also found that certain licensing terms used by Microsoft may affect the ability of other providers to offer services involving Microsoft software. To address these findings, the CMA recommended that Microsoft and AWS be considered for Strategic Market Status (SMS) designation under the Digital Markets, Competition and Consumers (DMCC) Act. The designation would allow for the application of conduct requirements and other regulatory measures. The CMA Board is expected to review potential designations in early 2026, with scope for ongoing oversight and coordination with frameworks such as the EU Data Act.