UK says Amazon and Microsoft’s cloud dominance is undermining competition

Amazon and Microsoft have long been leaders in global cloud infrastructure, but the UK’s competition regulator says their dominance is now stifling fair competition. A new report from the Competition and Markets Authority (CMA) warns that these two tech giants hold as much as 70–80% of the country’s public cloud market—an outsized share that may be hardening into structural lock-in. The CMA isn’t just worried about pricing or consumer harm. It’s worried about control.

And it’s not the only one. Across Europe, regulators are waking up to the strategic dependencies that have formed around hyperscale cloud services. What’s at stake is not just a competitive playing field, but the very foundations of national digital infrastructure.

While AWS and Azure’s technical leadership is undisputed, what alarms regulators is how that leadership is being maintained. The CMA has flagged several tactics that effectively discourage customers from switching providers. These include data egress fees (which make moving data out of a platform expensive), long-term contracts with minimum spend requirements, and limited interoperability between services.

These aren’t glitches. They’re features. Amazon and Microsoft have built their cloud businesses around deep ecosystem integration. Once a company—or a public agency—adopts a set of tools and workflows, moving to a competitor becomes costly, time-consuming, and potentially risky. The more they grow, the more unavoidable they become.

The CMA’s framing—“harm to competition”—undersells the issue. The real concern is about platform entrenchment: a condition where the cloud market begins to resemble a utility, but without the accountability or access rules that usually come with such status.

There are two reasons the UK is taking this step now. First, cloud usage has surged in both the private and public sectors, especially post-COVID. Government services, NHS data, education platforms—all increasingly depend on cloud infrastructure. Second, digital sovereignty has become a live issue. After Brexit, the UK has fewer joint industrial initiatives to rely on compared to the EU, which is pursuing regional alternatives like GAIA-X.

In this context, reliance on US cloud providers takes on a geopolitical dimension. It’s no longer just a matter of who’s cheapest or fastest. It’s about who controls the infrastructure through which public and economic life flows.

The CMA inquiry indirectly highlights the UK’s cloud gap: there is no homegrown cloud provider with anything close to AWS or Azure’s capabilities. Even the third-largest player, Google Cloud, holds a distant market share. That means competition in the UK cloud market is largely limited to two US firms with global scale advantages—and no serious domestic challenger in sight.

Smaller cloud providers face steep barriers to entry. They can’t match the scale, global data center footprint, or developer ecosystems of the market leaders. And they’re often forced to integrate with the very platforms they hope to displace, further diluting their independence.

This is why structural remedies—like mandating interoperability standards or banning punitive egress fees—are being seriously considered. But such moves could take years to implement and enforce, by which time the market may be even more consolidated.

For cloud customers, especially in sectors with compliance or national interest stakes, this inquiry is a warning. As convenience locks in complexity, and complexity locks in dependence, switching providers becomes less an IT choice and more a policy decision. Operators and executives should start modeling their exposure—not just in spend, but in capability dependencies and supplier resilience.

For other governments and regulators, the UK’s actions may be a blueprint—or at least a provocation. Australia, Canada, and the Gulf states face similar cloud concentration dynamics. Without coordinated regulation or the development of regional champions, most markets risk sleepwalking into architectural dependence.

This isn’t about breaking up tech giants or regulating pricing. It’s about reframing cloud infrastructure as critical infrastructure. The CMA’s provisional findings push the conversation toward viewing cloud services not as a commercial utility, but as a strategic domain requiring oversight, redundancy, and long-term resilience.

Amazon and Microsoft aren’t just vendors in this scenario—they’re de facto infrastructure custodians. And that changes the calculus for national policy.

The UK cloud market inquiry reveals something deeper than regulatory concern. It signals a shift in how countries perceive digital infrastructure and its custodians. When two American companies control most of the cloud terrain—through both scale and architecture—it creates a long-tail dependency that is hard to unwind.

This isn’t about tech envy or protectionism. It’s about platform concentration becoming policy risk. If switching becomes technically and financially unviable, then competition is no longer real. It’s performative. And that’s the line regulators are now preparing to redraw.