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Amazon has joined Google in criticizing Microsoft over licensing agreements that restrict competition in the UK\u2019s cloud computing market, claiming Microsoft\u2019s business practices make it harder for customers to switch to alternative cloud providers or run competing services alongside Azure. The Competition and Markets Authority<\/a> (CMA) is currently investigating the UK\u2019s cloud computing industry which Amazon and Microsoft dominate.<\/p>\n<\/div>\n \u201cSome IT providers, such as Microsoft, use licensing practices that restrict customer choice and make switching more difficult. For example, Microsoft changed its licensing terms in 2019 and again in 2022 to make it more difficult for customers to run some of its popular software offerings on Google Cloud, AWS, and Alibaba. To use many of Microsoft\u2019s software products with these other cloud services providers, a customer must purchase a separate license even if they already own the software. This often makes it financially unviable for a customer to choose a provider other than Microsoft.\u201d<\/p>\n<\/blockquote>\n<\/div>\n The CMA recently launched a formal investigation into the UK\u2019s cloud computing industry on October 5th after Ofcom, the country\u2019s telecoms regulator, raised concerns about Amazon and Microsoft\u2019s market dominance. According to the Ofcom research that prompted the referral<\/a>, Amazon Web Services (AWS) and Microsoft had a combined market share of 70 to 80 percent in 2022, with Google sitting at 5 to 10 percent as their closest competitor. \u201cThis is a \u00a37.5bn market that underpins a whole host of online services \u2013 from social media to AI foundation models,\u201d said CMA CEO Sarah Cardell<\/a>. \u201cMany businesses now completely rely on cloud services, making effective competition in this market essential.\u201d<\/p>\n<\/div>\n Google says that Microsoft\u2019s licensing practices leave customers with \u201cno economically reasonable alternative but to use Azure as their cloud services provider.\u201d<\/p>\n<\/div>\n<\/div>\n Amazon\u2019s concerns regarding Microsoft follow similar criticisms made by Google to the CMA in October. In the letter published<\/a> on Tuesday, Google claims Microsoft\u2019s licensing practices were harmful to UK customers because they leave them with \u201cno economically reasonable alternative but to use Azure as their cloud services provider, even if they prefer the prices, quality, security, innovations, and features of rivals.\u201d Google said these licensing practices were the biggest issue preventing competition in the UK cloud-computing market.<\/p>\n<\/div>\n Microsoft updated its cloud licensing agreements in August last year<\/a> in a bid to address regulatory complaints surrounding market competition and make it easier for European customers to move their existing software to rival networks. But the company\u2019s competitors remain unconvinced, with Google Cloud Vice President Amit Zavery telling Reuters<\/em><\/a> that Microsoft\u2019s updated licensing resulted in higher costs for customers who wanted to use Google or AWS instead of Azure. Zavery said that AWS does not pose the same anticompetitive risks as Microsoft despite having a larger share of the cloud market because AWS customers don\u2019t face the same licensing restrictions.<\/p>\n<\/div>\n The CMA\u2019s investigation aims to promote cloud competition, so smaller providers aren\u2019t locked out of the industry. For Google, in a distant third place, there\u2019s an opportunity to weaken its main competition. It\u2019s a similar situation for Amazon, which stands as the top cloud provider right now. It will be up to the CMA to investigate all the concerns fully, and get to the bottom of what needs to be done to ensure fair competition in a key market.<\/p>\n<\/div>\n\n