The country's digital regulators said the firms may be abusing their market power to thwart fair competition and that the cloud services of Microsoft and Amazon could face a full-blown antitrust probe in the UK.
As part of its year-long study into the cloud market, Ofcom found evidence of practices that make it harder for people to switch and use multiple cloud suppliers. It said it was concerned about the US tech firms because of their market position.
Fergal Farragher, Ofcom's Director for Market Study, said that high barriers to switching are already harming competition in a fast-growing market. We think more in-depth scrutiny is needed. Ofcom opened a probe in October because of concerns that the so-called hyperscale cloud providers - Amazon's AWS, Microsoft's Azure and Alphabet Inc.'s Google Cloud - could limit innovation and growth. They account for four-fifths of revenue in the UK public cloud infrastructure market, which Ofcom said is worth 15 billion $18.7 billion. The agency said they would refer the cloud infrastructure market to the Competition and Markets Authority for a market investigation. Ofcom's final report on its findings and its decision on the referral will be made before October 5.
A CMA spokeswoman said that they will be ready to carry out a market investigation into this area if Ofcom decides that it is necessary after the completion of its consultation process.
The CMA is one of the most high-profile watchdogs that are looking at Microsoft's $69 billion takeover of Activision Blizzard Inc. It said last month it had narrowed its investigation to focus solely on cloud gaming.
The European Union has received complaints from cloud firms about antitrust violations in the industry. Germany s Federal Cartel Office cited a strong increase in the importance of Microsoft's cloud services when it announced a probe into the firm's market power.
There are hurdles that could make it hard for UK cloud service customers to switch providers, such as charges to transfer data, technical restrictions on interoperability between different platforms, and technical restrictions on interoperability between different platforms. It said that discounts can be used by the biggest businesses to entice customers to use one provider when they could be getting better quality elsewhere.
Microsoft said that they remain committed to ensuring the UK's cloud industry stays competitive and supporting the transformative potential of cloud technologies to help speed up growth in the UK economy.
An Amazon AWS spokeswoman said it will continue to work with Ofcom ahead of the final report.
The technology of their choice is what we use in cloud services to give customers the freedom to build the solution that is right for them, according to the spokesperson.