Microsoft faces second major UK investigation

Britain’s competition regulator said on Tuesday it would again investigate Microsoft’s software‑licensing practices in the cloud market as part of a broader probe, months after declining to act on earlier findings.

Last year a Competition and Markets Authority ​inquiry group found the dominance of Amazon and Microsoft was harming competition in cloud computing, ​with the latter singled out for its licensing practices.

It said Microsoft was ⁠using its power in enterprise software, such as Windows Server and Microsoft 365, to limit competition ​by charging licensing fees when its services were used on rival platforms.

PRAGMATIC ACTION

Antitrust authorities in the ​European Union and the United States are also investigating the cloud computing market.

The CMA said on Tuesday that Amazon and Microsoft were taking “material steps” to lower some of their fees in the cloud market following its previous investigation.

The ​two companies have around 30-40% shares in cloud services such as processing, storage and networking. ​Google is the third main provider, with a smaller share of 5-10%.

The CMA said its new investigation into Microsoft’s ‌business ⁠software ecosystem would allow it to assign the company with “strategic market status” in business software, which would allow it to make targeted interventions in software licensing.

CMA chief executive Sarah Cardell said the regulator was acting in a “flexible, pragmatic way to deliver real impact, as quickly as possible for UK ​customers”.

“Cloud remains central to ​our approach – we’ve seen ⁠real progress through our engagement with Microsoft and Amazon to drive meaningful improvements on egress fees and interoperability and we expect more action from ​them over the coming months,” she said.

Microsoft said the changes it had ​agreed with ⁠the CMA were focused on charges for moving data, switching, and interoperability.

“The changes address the CMA’s commitment to ensuring that UK customers can continue to move, deploy, and operate their workloads in the clouds ⁠of ​their choice with confidence, flexibility, and ever reduced friction,” vice ​chairman and president Brad Smith said in a statement.

Amazon said the steps it had taken – around multicloud adoption, data portability and switching – ​formalised its commitment to customer choice.