- The UK Competition and Markets Authority today publishes its long-awaited cloud market report, finding dominant players AWS and Microsoft limit customer choice and hinder competition.
- The CMA recommends Strategic Market Status designation under new legislation, paving the way for binding rules on interoperability and licensing.
What happened: CMA targets AWS and Microsoft in £15B UK cloud market
The UK Competition and Markets Authority releases its final report on 31 July 2025 after a two‑year review of the £15 billion ($19.4 billion) cloud services market. It finds the sector is highly concentrated, with AWS and Microsoft each accounting for between 30 % and 40 % of UK customer spend. The report concludes that customers face barriers to switching providers, risk of technical lock‑in, and discriminatory pricing models.
While acknowledging competition exists, the CMA criticises current licensing practices for favouring big providers and harming smaller rivals. Both AWS and Microsoft respond by asserting that the CMA disregards “clear evidence of robust competition” and that the cloud market is “dynamic and competitive”, particularly in the era of rising AI investments.
Rather than imposing immediate remedies, the CMA proposes designating AWS and Microsoft with Strategic Market Status (SMS) under the new Digital Markets, Competition and Consumers Act 2024. This would enable the Digital Markets Unit to enforce conduct requirements, including licensing limits, bundled offers restrictions, and interoperability rules. However, any intervention is not expected to begin before early 2026, with outcomes likely arriving in late 2026 or early 2027.
Also read: UK’s CMA targets Apple, Google mobile dominance
Also read: UK CMA delays action on mobile browsers
Why it’s important
This report marks a milestone in UK digital markets regulation. It signals a shift from passive observation of cloud competition to proactive enforcement using expanded powers under the DMCC Act, which came into force in early 2025. The proposed SMS designations reflect a policy choice by regulators to intervene in markets previously deemed self‑correcting.
For enterprises, the prospect of enforced interoperability and fair licensing could reduce vendor lock‑in and enable multi‑cloud strategies. Cloud service providers, telcos and data‑centre operators may therefore see new opportunities in cross‑cloud connectivity and switching services, aligning with industry trends toward openness and flexibility. Globally, regulators such as the European Commission and Australia’s ACCC are watching closely, meaning the UK’s stance may set precedent across other jurisdictions.
This proactive stance under CMA leadership indicates a willingness to balance pro‑growth ambitions with consumer protection and fair competition. The regulator’s approach contrasts with earlier cases such as the Microsoft‑Activision investigation, showing now a more iterative and open‑minded dialogue with companies over remedies.
I take a cautiously optimistic view. The CMA’s willingness to tackle structural barriers in cloud competition is overdue. Provided the DMU implements remedies effectively, British businesses could benefit from reduced costs and increased innovation. But success depends on rigorous oversight and enforcement as the Digital Markets Unit begins formal investigations.
