UK Competition Authority Rains on Microsoft and Amazon Cloud Parade

Britain's Competition and Markets Authority concluded that Microsoft and Amazon hold "significant unilateral market power" in cloud services and recommended investigating both companies under new competition rules. The regulator said it had concerns about practices creating customer "lock-in" effects through egress fees and unfavorable licensing terms that trap businesses in difficult-to-exit contracts.

Microsoft and Amazon each control roughly 30-40% of the infrastructure-as-a-service market, while Google holds 5-10%. Microsoft disputed the findings, calling the cloud market "dynamic and competitive." Amazon said the probe recommendations were "unwarranted."

I grieve for the King's English

[Entrope]

There are two market leaders, and the regulator describes this as a "unilateral" situation. Together they maybe serve 40% of the market, and even adding the third biggest seller -- who also happens to dominate online search and wants to capture cloud computing business -- doesn't get above 50% of the market.

Governments are just about the only unilateral movers in this space.

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[Rinnon]

I think you may have misread (or maybe you have better information from elsewhere). Summary says:

Microsoft and Amazon each control roughly 30-40% of the infrastructure-as-a-service market, while Google holds 5-10%.

That would be 65-90% all in.

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[Entrope]

That's still a long way from unilateral, though, even if we look narrowly at the IaaS market.

Re:I grieve for the King's English

[subreality]

I interpret "unilateral market power" to mean that the suppliers have asymmetric power over the customers. There is little competition once you are locked into an ecosystem.

Sure, you can rent some compute from another company, but you have all these networks and firewalls and databases and data stores you've set up within one company's borders. The competition has similar services, but they're not quite drop in replacements, so you can't just pick up and move to take advantage of better pricing. It can take years to rebuild your infrastructure if you want to escape.

They are also an oligopoly, which limits the need to compete. The customer has very little power to negotiate better terms when there's only one, maybe two, other serious players in the field.

So 2 companies is an illegal monopoly huh?

[TechyJay]

I guess we have to break up Google and Bing. Playstation and Nintendo is an unfair market duopoly. Windows and Mac are strangling the market, there needs to be more. iPhone and Androids cannot continue because there is no 3rd player. Apple Music and Spotify have to be stopped because it's a dangerous duopoly. Coke and Pepsi are going to have to be split up into more companies, it's unsafe to only have two. Oops looks like there aren't enough political parties in the USA, better throw up a red flag. Oh no! A

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[mccalli]

I mean...I'm not American so have no view on your parties but otherwise, yes you got the idea. That's what a competition authority is meant to do. Of the ones you mention there's investigations into Google search, Microsoft was already convicted for Windows but wriggled out of it, Apple and Google are both being investigated for practices on iPhone/Android respectively, Apple Music/Spotify both complained about dominant abuse and I think there was some investigation (I know there were complaints, not keepin