British Broadcasting Agency reports antitrust violation status of Amazon and Microsoft
As a result of a monopoly situation survey of the cloud computing market by the British Broadcasting Authority (Ofcom), it became clear that a monopoly situation by Amazon and Microsoft is occurring. Ofcom will continue to investigate and plans to submit a final report in 2023.
Ofcom proposes to refer UK cloud market for investigation - Ofcom
Many companies and government organizations that develop services on the Internet use cloud computing services such as 'Amazon Web Services (AWS)', 'Microsoft Azure', and 'Google Cloud Platform (GCP)'. However, according to Ofcom, there was concern that new entry into the cloud market may be difficult. Ofcom started a market survey in October 2022 by exercising its authority under the 2002 Companies Act to ensure that the cloud market is not in a monopoly state. Then, on April 5, 2023, we submitted an interim investigation report.
Below is a diagram showing the share of the cloud market in the UK as revealed by Ofcom's survey. It became clear that AWS and Microsoft Azure have secured a share of 30% to 40%, GCP has a share of 5% to 10%, and other companies have a share of 20% to 30%. I was.
Based on the above results, Ofcom said, ``Amazon and Microsoft are the leading providers of the cloud computing market in the UK. The practices of Amazon and Microsoft, which have secured a large share of the market, are of particular concern, ”he argues that Amazon and Microsoft's strategies are hindering competition in the cloud market. .
The `` strategies to hinder market competition '' that are said to be implemented by Amazon and Microsoft are as follows.
・Expensive egress fee
Many cloud computing services charge a fee called 'egress fee' when the user performs the operation of 'moving data from the company's cloud to the outside'. Large providers such as Amazon and Microsoft set high egress fees to discourage users from moving to another provider.
・Technical restrictions on interoperability
By adopting systems that differ from those of other companies, major providers ensure that data structures and applications developed for their own cloud systems cannot be used in other companies' cloud systems. This creates a situation on the user side where 'if you migrate to another company, you have to redevelop the data structure and application', which hinders migration to other companies.
・Charge discounts to retain users
Fee discounts can also be beneficial to users. However, large providers often set discounted rates for “certain service configurations,” creating a situation where even if the features of other companies are more attractive, they cannot migrate due to increased costs. increase.
Ofcom is considering delegating further research to the UK Competition and Markets Authority (CMA).
???? We are proposing to refer the UK cloud market to @CMAgovuk for further investigation.
— Ofcom (@Ofcom) April 5, 2023
This follows our study of the cloud market identifying practices that could limit competition - particularly the practices of Amazon and Microsoft because of their market position.
Ofcom is also accepting feedback on the Interim Investigation Report until May 17, 2023. The final report on the cloud market research is expected to be submitted by October 5, 2023.
We are now inviting feedback on our interim findings, by 17 May 2023.
— Ofcom (@Ofcom) April 5, 2023
We intend to publish a final report on our findings and recommendations, including our decision on a market investigation reference, by 5 October 2023.
Read more: https://t.co/oIoQ1VUWJS
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