UK set to address US tech dominance of cloud computing

British regulators Thursday said that competition around cloud computing in the UK "is not working well", having addressed concerns that Amazon and Microsoft are dominating the sector.

The Competition and Markets Authority (CMA) will now address the matter further, a statement said.

It follows a decision already in October 2023 for a deeper investigation following an initial probe by the UK's communications regulator Ofcom that lasted one year.

"Our task in this investigation has been to decide whether competition is working well in cloud services markets and, if it is not, to decide what action should be taken to remedy any harms to competition," the CMA said Thursday.

"Our final decision is that competition is not working well, so we have made recommendations to address this."

The CMA could designate the US companies with "strategic market status", subjecting them to special requirements under new UK regulations.

The regulator on Thursday noted that "cloud services have transformed the way UK businesses and public services run their operations and are a critical input to the digital services that UK consumers use each day".

The CMA added that customers spent £10.5 billion ($13.9 billion) on cloud services in 2024, with spending growing by almost 30 percent each year since 2020.

"Cloud services also underpin AI model development and deployment," it noted.