Britain’s latest regulatory move, known as the UK CMA cloud ruling, is putting pressure on cloud computing giants Microsoft Corp. and Amazon. In July 2025, the UK’s Competition and Markets Authority (CMA) announced that both companies hold “significant unilateral market power” in cloud infrastructure and may be stifling fair competition. The ruling sets the stage for a deeper investigation under the UK’s new Digital Markets, Competition and Consumers (DMCC) Act.
What Is the UK CMA Ruling on Cloud Services?
The UK CMA cloud ruling emerged from a long-running inquiry into how large tech firms operate within Britain’s growing cloud market. The CMA concluded that Microsoft Corp. and Amazon each command between 30% and 40% of the UK’s infrastructure-as-a-service (IaaS) market. Google, by contrast, holds only 5% to 10%.
The concern isn’t just market share. It’s how these companies are maintaining dominance—through what regulators describe as restrictive business practices that limit customer choice and trap businesses in long-term, high-cost contracts.
Egress Fees and Licensing: The Lock-In Effect
Central to the ruling are two key issues:
- Egress Fees: These are charges businesses incur when moving data out of one cloud provider to another. The CMA says these fees discourage switching and reduce market competition.
- Licensing Restrictions: The regulator highlighted how Microsoft Corp.’s licensing policies make its software cheaper to run on its own Azure platform than on rival services like AWS. This practice gives Microsoft an unfair advantage and narrows user choice.
Together, these mechanisms create what the CMA calls a “lock-in effect,” which prevents small businesses, startups, and enterprises from migrating to more affordable or innovative cloud solutions.
Strategic Market Status: What It Means
Under the DMCC Act, the UK can designate companies as having Strategic Market Status (SMS) if they demonstrate entrenched market power. Companies with SMS may face stricter rules, including mandated interoperability, clearer pricing, and restrictions on bundling services.
The UK CMA cloud ruling could lead to both Microsoft Corp. and Amazon receiving SMS designations—opening the door for enforced changes in their pricing structures, licensing models, and data portability requirements.
Reactions from Microsoft, Amazon, and Google
Both Microsoft Corp and Amazon pushed back against the CMA’s findings. Microsoft claimed that the ruling “misses the mark,” arguing that the cloud space is rapidly evolving due to AI-driven innovation. Amazon described the CMA’s recommendations as “unwarranted,” warning that they could deter investment in the UK’s tech sector.
Google, on the other hand, applauded the decision, hailing it as a significant milestone for equity and progress in the UK cloud sector.
What Comes Next for UK Cloud Users?
The implications of the UK CMA cloud ruling extend beyond just two tech giants. If the investigation leads to SMS designation, cloud customers may benefit from:
- Easier provider switching
- More transparent pricing models
- A broader ecosystem of competitive cloud offerings
The ruling also positions the UK as a global leader in proactive digital regulation, with potential ripple effects across Europe and the United States.
Final Thoughts
The UK CMA cloud ruling marks a critical step in rebalancing power in the cloud services market. By targeting the practices of dominant providers like Microsoft Corp. and Amazon, the UK is signaling that regulatory scrutiny in the digital era will be deeper, broader, and more responsive than ever before.
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