UK Competition Watchdog Probes Amazon, Microsoft Over Cloud Services Market Concerns Under New Tech Law.

The UK competition watchdog, the Competition and Markets Authority, has raised concerns about the cloud services market dominated by Amazon Web Services (AWS) and Microsoft. The regulator believes certain features in the market hurt competition and may require the companies to comply with the Digital Markets, Competition and Consumer Act. Microsoft and AWS have criticized the verdict, arguing the cloud market is dynamic and competitive.

The UK's Competition and Markets Authority (CMA) has expressed concerns about the dominance of Amazon Web Services (AWS) and Microsoft in the cloud services market. The regulator believes that certain features of the market could be hindering competition and may require the companies to comply with the Digital Markets, Competition and Consumer Act [1].

AWS and Microsoft have responded to the CMA's concerns, arguing that the cloud market is highly dynamic and competitive. They contend that the current market conditions do not warrant regulatory intervention [1].

According to Reuters, AWS has been growing at a robust pace, with a 17% increase in revenue in the second quarter of 2025. However, the company faces competition from other major players such as Alphabet's Google Cloud, which has recently secured significant deals, including one with OpenAI [2].

The CMA's intervention comes at a time when the cloud market is experiencing a surge in demand, particularly for generative AI services. This growth has led to increased investment in data center capacity by AWS, Microsoft, and Alphabet. Despite this, the CMA believes that the current market structure may not be fostering the same level of innovation and competition as other sectors [1].

The UK government is also exploring the potential of Smart Data schemes in digital markets. The government is assessing whether the new Smart Data powers introduced by the Data (Use and Access) Act 2025 should be applied to support use cases in digital markets. This initiative aims to improve access to data for innovators and businesses, potentially enhancing competition and consumer benefits [2].

The CMA's investigation into the cloud market is ongoing, and the outcome could have significant implications for AWS, Microsoft, and other players in the industry. As the market continues to grow, it will be crucial for regulators to ensure that competition remains robust and that consumers and businesses benefit from innovative services.

References:
[1] https://www.reuters.com/business/retail-consumer/amazon-still-online-retailer-choice-cloud-business-faces-competition-2025-07-30/
[2] https://www.gov.uk/government/calls-for-evidence/smart-data-opportunities-in-digital-markets/smart-data-opportunities-in-digital-markets