Amazon and Microsoft’s cloud dominance referred for UK competition probe
Ofcom said it received evidence showing Microsoft makes it less attractive for customers to run its Office productivity apps on cloud infrastructure other than Microsoft Azure.
Igor Golovniov | Sopa Images | Lightrocket via Getty Images
Britain’s anti-competition regulators have been tasked with investigating Microsoft and Amazon‘s dominance of the cloud computing market.
Media watchdog Ofcom on Thursday referred its inquiry for further investigation to the Competition and Markets Authority, kickstarting the process.
Ofcom said that it had identified features which make it more difficult for U.K. businesses to switch cloud providers, or use multiple cloud services, and that it is “particularly concerned” about the position of market leaders Amazon and Microsoft.
“Some UK businesses have told us they’re concerned about it being too difficult to switch or mix and match cloud provider, and it’s not clear that competition is working well,” Fergal Farragher, Ofcom’s director responsible for the market study, said in a statement Thursday.
“So, we’re referring the market to the CMA for further scrutiny, to make sure business customers continue to benefit from cloud services.”
Ofcom is concerned that so-called “hyperscalers” like Amazon Web Services and Microsoft Azure are limiting competition in the cloud computing market. These are companies that allow businesses of all stripes to carry out critical computing tasks — like storage and management of data, delivery of content, analytics and intelligence — over the internet, rather than through servers stored on site, or “on premise.”
AWS and Microsoft Azure are the biggest players in the market. AWS’ cloud solution is primarily targeted at startups, while Microsoft prioritizes big enterprises. AWS and Microsoft Azure account for roughly 60% to 70% of cloud spend, according to an Ofcom estimate. Combined, Amazon, Microsoft and Google generate roughly 81% of revenues in the U.K.’s cloud infrastructure services market, according to Ofcom, which estimates the market to be worth £15 billion ($18.2 billion).
The CMA probe comes amid the fast adoption of AI — cloud services, which are enabled by vast data centers, underpin many of the power-intensive generative AI models, such as OpenAI’s ChatGPT, Microsoft’s Bing Chat and Google’s Bard.
The Competition and Markets Authority said in a statement that it welcomes the Ofcom probe referral, adding that the cloud space “underpins a whole host of online services – from social media to AI foundation models.”
“Many businesses now completely rely on cloud services, making effective competition in this market essential,” Sarah Cardell, CEO of the CMA, said in a statement Thursday.
“Strong competition ensures a level playing field so that market power doesn’t end up in the hands of a few players – unlocking the full potential of these rapidly evolving digital markets so that people, businesses, and the UK economy can get the maximum benefits.”
The CMA’s independent inquiry group will now examine the market and identify what, if any, action should be taken. The CMA will conclude its investigation by April 2025.
Competition concerns
Ofcom, the agency responsible regulating technology, broadcast and telecom operations in the U.K., said that it identified a number of practices in the cloud industry that were of particular concern.
The regulator said that so-called “egress fees” charged by cloud vendors like Amazon and Microsoft make it tougher for businesses to move their data between providers, or to “multi-cloud” by using multiple cloud providers. Egress fees are charges for cloud companies to remove the data of firms from a cloud environment.
Ofcom also said that cloud companies have introduced “technical barriers” to interoperability — the ability of different cloud platforms and services to work together and exchange data without any barriers or disruptions. The authority said that this “makes it more difficult [for firms] to combine different services across cloud providers or to change provider.”
Lastly, Ofcom raised alarm bells over committed spend discounts, or incentives to give customers a discount if they spend a certain amount of money. While this can reduce customer costs, it also encourages companies to use a single cloud provider for all or most of their cloud needs, even when a cheaper alternative is available.
Competing cloud firms including Google, as well as regulators, have flagged concerns with Microsoft Azure, in particular — namely, allegedly unfair licensing terms that serve to “lock in clients,” keeping them attached to only Microsoft’s technology and making it harder to switch to other providers.
Microsoft’s cloud licensing terms are the subject of a separate European Union inquiry. The EU isn’t formally investigating Microsoft’s Azure cloud computing platform, but it has been assessing complaints from companies including France’s OVHCloud about Microsoft’s licensing terms.
An attendee wearing a Super Mario costume uses a Nintendo Switch 2 game console while playing a video game during the Nintendo Switch 2 Experience at the ExCeL London international exhibition and convention centre in London, Britain, April 11, 2025.
Isabel Infantes | Reuters
Nintendo on Friday announced that retail preorder for its Nintendo Switch 2 gaming system will begin on April 24 starting at $449.99.
Preorders for the hotly anticipated console were initially slated for April 9, but Nintendo delayed the date to assess the impact of the far-reaching, aggressive “reciprocal” tariffs that President Donald Trump announced earlier this month.
Most electronics companies, including Nintendo, manufacture their products in Asia. Nintendo’s Switch 1 consoles were made in China and Vietnam, Reuters reported in 2019. Trump has imposed a 145% tariff rate on China and a 10% rate on Vietnam. The latter is down from 46%, after he instituted a 90-day pause to allow for negotiations.
Nintendo said Friday that the Switch 2 will cost $449.99 in the U.S., which is the same price the company first announced on April 2.
“We apologize for the retail pre-order delay, and hope this reduces some of the uncertainty our consumers may be experiencing,” Nintendo said in a statement. “We thank our customers for their patience, and we share their excitement to experience Nintendo Switch 2 starting June 5, 2025.”
The Nintendo Switch 2 and “Mario Kart World“ bundle will cost $499.99, the digital version “Mario Kart World” will cost $79.99 and the digital version of “Donkey Kong Bananza” will cost $69.99, Nintendo said. All of those prices remain unchanged from the company’s initial announcement.
However, accessories for the Nintendo Switch 2 will “experience price adjustments,” the company said, and other future changes in costs are possible for “any Nintendo product.”
It will cost gamers $10 more to by the dock set, $1 more to buy the controller strap and $5 more to buy most other accessories, for instance.
WATCH: Nintendo has ‘a lot of work to do’ to convince casual users to upgrade to Switch 2: Kantan Games
An employee walks past a quilt displaying Etsy Inc. signage at the company’s headquarters in the Brooklyn.
Victor J. Blue/Bloomberg via Getty Images
Etsy is trying to make it easier for shoppers to purchase products from local merchants and avoid the extra cost of imports as President Donald Trump’s sweeping tariffs raise concerns about soaring prices.
In a post to Etsy’s website on Thursday, CEO Josh Silverman said the company is “surfacing new ways for buyers to discover businesses in their countries” via shopping pages and by featuring local sellers on its website and app.
“While we continue to nurture and enable cross-border trade on Etsy, we understand that people are increasingly interested in shopping domestically,” Silverman said.
Etsy operates an online marketplace that connects buyers and sellers with mostly artisanal and handcrafted goods. The site, which had 5.6 million active sellers as of the end of December, competes with e-commerce juggernaut Amazon, as well as newer entrants that have ties to China like Temu, Shein and TikTok Shop.
By highlighting local sellers, Etsy could relieve some shoppers from having to pay higher prices induced by President Trump’s widespread tariffs on trade partners. Trump has imposed tariffs on most foreign countries, with China facing a rate of 145%, and other nations facing 10% rates after he instituted a 90-day pause to allow for negotiations. Trump also signed an executive order that will end the de minimis provision, a loophole for low-value shipments often used by online businesses, on May 2.
Temu and Shein have already announced they plan to raise prices late next week in response to the tariffs. Sellers on Amazon’s third-party marketplace, many of whom source their products from China, have said they’re considering raising prices.
Silverman said Etsy has provided guidance for its sellers to help them “run their businesses with as little disruption as possible” in the wake of tariffs and changes to the de minimis exemption.
Before Trump’s “Liberation Day” tariffs took effect, Silverman said on the company’s fourth-quarter earnings call in late February that he expects Etsy to benefit from the tariffs and de minimis restrictions because it “has much less dependence on products coming in from China.”
“We’re doing whatever work we can do to anticipate and prepare for come what may,” Silverman said at the time. “In general, though, I think Etsy will be more resilient than many of our competitors in these situations.”
Still, American shoppers may face higher prices on Etsy as U.S. businesses that source their products or components from China pass some of those costs on to consumers.
Etsy shares are down 17% this year, slightly more than the Nasdaq.
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