The Competition and Markets Authority's cloud services market investigation closed on 31 July 2025 with a final decision that Amazon Web Services and Microsoft hold positions of significant market power, and a recommendation to open Strategic Market Status investigations into both. On 25 March 2026 the CMA Board declined to open them, accepting voluntary commitments from the two firms instead, a decision published on 31 March 2026.
That decision has been read mostly as a regulatory anticlimax. For anyone running cloud infrastructure in the UK it is something more specific: a set of dated, checkable changes to what you can move, what it costs to move it, and what your provider is contractually obliged to let you do. Several are already live. The rest land between now and early 2027.
This is what changed, when each piece takes effect, and what the CMA decided not to fix.
What did the CMA actually find wrong with the UK cloud market?
The CMA identified three mechanisms that were holding competition back. Two of them are things you pay for directly.
The UK cloud market is worth roughly $9 to $10.5 billion a year and growing at 30 to 33 per cent. AWS holds 40 to 50 per cent of infrastructure-as-a-service and Microsoft 30 to 40 per cent, putting the two of them together at 70 to 80 per cent of total UK cloud spend. Google Cloud sits somewhere between 5 and 10 per cent.
Against that concentration, fewer than 1 per cent of businesses switch provider in a given year. The CMA put the resulting customer detriment at $430 to $500 million annually, on the assumption that prices sit 5 per cent above competitive levels.
Egress fees. The charge for moving data out of a platform was the single most damaging barrier the CMA found. Its analysis put all three major providers' egress margins at three to five times their average cost per gigabyte, against published rates of roughly $0.08 to $0.10 per gigabyte for internet egress. The regulator noted that settlement-free peering between the providers themselves enables near cost-free transfers, a cost structure customers have never had access to.
For the smallest customers, spending £1,000 to £10,000 a year, a full egress in a switching scenario runs at 0 to 5 per cent of annual spend. For enterprises above £100,000, egress costs frequently land between $50,000 and $500,000 in absolute terms. The CMA's characterisation is worth quoting for what it implies: egress operates as a switching tax, and customers rationally accept worse pricing from an incumbent rather than pay it.
Technical incompatibility. Each major provider runs more than 200 distinct services, most of them proprietary. Identity systems differ, APIs differ, and the CMA's assessment of database migration was "very complex", with platform-as-a-service migration "extremely difficult". Commissioned research covering 60 interviews at 50 UK companies found 65 per cent citing technical challenges as the primary barrier, while 60 per cent were actively trying to reduce single-provider dependency.
Microsoft's software licensing. This is the finding with the clearest price tag. Azure Hybrid Benefit lets Microsoft customers apply existing on-premises licences to Azure at no extra cost. AWS and Google, buying through the Services Provider Licence Agreement, pay materially higher wholesale rates for the same software. The result is that customers running identical Windows Server and SQL Server workloads pay 20 to 40 per cent more on AWS or Google purely because of licensing. Google Cloud's formal response to the provisional decision said it strongly agreed with the finding.
If your Windows and SQL estate is large, that gap has been quietly shaping your architecture decisions for years.
What has AWS already changed?
Four things went live before the CMA's final decision.
Free multi-cloud egress credits for switching arrived in October 2025. A data portability register covering more than 200 services followed in November 2025, documenting which services can export data and through which APIs, so customers and competitors can both see what is portable. Also in November, IAM Autopilot and Outbound Identity Federation shipped, aimed at the identity and permissions migration that the CMA found so obstructive.
Through 2025 AWS also began supporting industry-standard AI protocols including MCP and A2A, which reduces lock-in to AWS-specific AI tooling.
What is AWS committed to doing next?
A contractual addendum, already live. AWS published its UK Customer Switching and Portability Addendum on 31 March 2026, and the CMA's decision paper records it as applying immediately and automatically to UK contracts. This is the substantive change: free switching rights and at-cost multi-cloud egress previously existed as discretionary programmes, and the addendum converts them into contractual rights, with no negotiation required. Two details from the addendum's own text matter before you rely on it. A switching request must go to AWS Customer Support at least two months before your planned switch date, and the 180-day transitional period can be extended once by written notice before it expires.
The switching window doubles. Support extends from 90 days to 180 days for UK customers, covering both full-account switches and single-service exits. The CMA's decision paper states the free-egress right applies as soon as a customer decides to switch at least one service.
AWS Interconnect – Multicloud. General availability with Google Cloud was announced on 14 April 2026 across five regions including London. From May 2026 it carries a free 500 Mbps local tier, which is roughly 160 TB a month at no charge. Paid tiers run from 1 to 100 Gbps on hourly bandwidth pricing rather than per-gigabyte egress, with a colocated 10 Gbps link at $12.33 an hour, about $9,000 a month. Microsoft integration is committed for the third or fourth quarter of 2026.
The arithmetic matters more than the product. An organisation moving 160 TB a month between clouds pays nothing on the free tier, against roughly $13,000 to $16,000 a month at standard egress rates. Provisioning takes minutes to a day, where legacy private connectivity took weeks or months.
What has Microsoft committed to?
Microsoft's changes started slightly earlier and run slightly longer.
At-cost egress for multi-cloud transfers went live in September 2025. The Azure Copilot Migration Agent followed in November 2025, automating migration assessment and planning. Azure Arc's multi-cloud support expanded in November 2025 and again in March 2026, allowing AWS EC2 instances and Google Cloud VMs to be discovered and managed from the Azure portal. Discovery and visibility are free; advanced services such as Azure Monitor log ingestion and Defender are charged separately.
Ahead of that sit several dated commitments.
Contractual amendments within two months, so by roughly 31 May 2026, embedding free switching rights and at-cost multi-cloud egress into Azure service agreements.
The switching window triples, from 60 days to 180 days. The more consequential half of this commitment is the new single-service exit. Previously, free switching could only be triggered by exiting an entire Azure account. Under the new commitment you can move one service, a SQL Server database for example, without abandoning everything else you run on Azure. For anyone running a mixed estate, that is the difference between a theoretical right and a usable one.
Premium Global Network egress at cost, applying immediately. The CMA's decision paper of 31 March 2026 records free switching and at-cost multi-cloud egress over Microsoft's premium network as applying immediately for customers using Azure services in UK datacentres, to be formalised in contracts as soon as possible.
Direct datacentre connections, with AWS Direct Connect in summer 2026 and Google Cloud Interconnect in early 2027. These eliminate internet-based egress entirely for interconnected customers.
A formal interoperability request mechanism, within six months, giving competitors and independent software vendors a documented channel to request interoperability features, with a commitment from Microsoft to evaluate and respond transparently.
What did the CMA decide not to fix?
Three things, and they are as important as the commitments.
Committed Spend Agreements were cleared. Smaller providers had argued that volume-discount commitments foreclose competition. The CMA's econometric analysis across more than 3,000 customer scenarios found rivals unable to compete in only 1.61 per cent of cases, with providers retaining an incentive to compete for new agreements in 96 per cent of scenarios. It concluded that these agreements enable volume discounts and migration credits, which facilitate switching rather than prevent it. They were expressly excluded from the commitments, to the visible disappointment of smaller providers.
Strategic Market Status was not pursued for cloud. The recommendation was not tentative. The investigation's final decision, published on 31 July 2025, found that AWS and Microsoft hold positions of significant market power and recommended the CMA Board consider prioritising SMS investigations into both firms' cloud services. SMS designation would have brought binding conduct obligations, ongoing regulatory monitoring, and faster intervention. The Board, meeting on 25 March 2026, declined, choosing what its decision paper calls participative dialogue, with a progress review after six months. One governance detail sits in that paper's first footnote: the Board discussion was chaired by Justin Basini as Senior Independent Director because the CMA's chair, Doug Gurr, recused himself from the decision. Gurr was Amazon UK's country manager until November 2020, per his gov.uk biography.
The Board did open one formal process. An SMS investigation into Microsoft's business software ecosystem launched in May 2026, and the decision paper connects it directly to the cloud findings: the CMA had, in its own words, "not identified material progress" on the licensing practices that make Windows Server and SQL Server workloads dearer on rival clouds, and a business software designation would give it a route to act on them. It is a route that starts the designation clock from zero, on software rather than cloud infrastructure.
Enforcement is the open question. These are commitments rather than conduct requirements. Several carry discretionary eligibility criteria, and there is no independent audit mechanism attached. A commitment you have to qualify for is weaker than a rule that applies to you. The dated backstop is the review point: the decision paper commits a dedicated CMA team to seeing the steps "delivered in a meaningful and timely way" ahead of a progress update to the CMA Board in six months, so around late September 2026, and states that the CMA "always retains the option to return to the more formal alternative if necessary".
What should a UK business do about it?
Four practical things, in rough order of how soon they pay off.
Check the addendum covers you, and ask for Microsoft's amendments by name. AWS's UK Customer Switching and Portability Addendum, published 31 March 2026, applies automatically to UK contracts, so the job is to confirm it covers your agreement and to diarise its two-month notice requirement rather than to negotiate it in. Microsoft's amended Azure terms, due by roughly 31 May 2026, are the ones to ask for by name. These are the artefacts that turn discretionary goodwill into a contractual right; sign a renewal without confirming them and you have inherited the old position for the length of the term. This belongs on the same checklist as the exit clauses and hidden costs that make UK IT contracts expensive to leave.
Re-run your switching cost model. If you last assessed a migration and abandoned it on egress cost, the number has changed. A 180-day window plus at-cost multi-cloud egress plus a free 500 Mbps interconnect tier is a materially different calculation from the one most organisations ran in 2024.
If you run a mixed estate, look again at single-service exit. Microsoft's change is the one most likely to be usable this year. Moving one workload without unpicking the whole relationship is how multi-cloud actually happens in practice, and it is a live option in a way it was not before. The same discipline applies to multi-vendor IT arrangements generally, where the gaps between providers are where the cost hides.
Diarise the dates. Microsoft's contractual amendments around 31 May 2026. AWS Interconnect with Microsoft in Q3 or Q4 2026. The CMA Board's six-month progress review around late September 2026, the first public test of whether the commitments are being honoured. Google Cloud Interconnect to Azure in early 2027. Each is a point at which an option that does not exist today becomes available, and a renewal signed just before one of them is a renewal signed on worse terms than the market will offer a month later.
For regulated firms there is a further dimension: exit and portability are already an operational resilience question, not only a commercial one, which is covered in our guide to FCA operational resilience requirements for UK fintech cloud deployments. Public sector buyers face a parallel set of questions through the G-Cloud and Digital Marketplace route. And for anyone earlier in the journey, our explainer on what the cloud actually is sets out the underlying model.
The wider market has not stood still while the investigation ran. Data residency has become a product decision, with Datadog launching on AWS Europe in London specifically to meet UK requirements, and sovereignty has begun to move procurement outcomes, as when Airbus selected Scaleway after a competitive European tender.
Sources
Competition and Markets Authority, Cloud services market investigation case page, published 5 October 2023 and closed 31 July 2025, and Actions on cloud and business software through the UK digital markets competition regime, 31 March 2026 — the Board's decision of 25 March 2026, the recusal recorded in the paper's first footnote, the six-month progress review, and Annexes 1 and 2 setting out the commitments accepted from Microsoft and AWS with their content and implementation dates. Doug Gurr's prior role at Amazon UK is stated in his published biography on gov.uk.
Competition and Markets Authority, Cloud services market investigation: final decision report, published 31 July 2025 — the finding that AWS and Microsoft hold positions of significant market power and the recommendation to prioritise SMS investigations into both firms' cloud services.
Competition and Markets Authority, Cloud services market investigation: provisional decision report, 28 January 2025 — market shares, market size and growth, the sub-1 per cent annual switching rate, the $430 to $500 million detriment estimate, the findings on egress fees, technical barriers and licensing, and the recommendation to consider Strategic Market Status.
Competition and Markets Authority appendices to the provisional decision — Appendix L and Appendix Q on egress fee background and providers' cost of egress, Appendix M on customers' cost scenarios, Appendix T on licensing analysis, Appendix R on market power, and Appendix U on the quantitative analysis of Committed Spend Agreements.
Google Cloud, Response to the provisional decision, submitted to the CMA — its agreement with the finding on Microsoft licensing.
Amazon Web Services, UK Customer Switching and Portability Addendum, published 31 March 2026 — the two-month switching request notice, the 180-calendar-day transitional period and the one-time extension right — and About Amazon UK, Delivering good outcomes for UK customers, 31 March 2026.
Amazon Web Services, AWS Interconnect – Multicloud pricing and product documentation, and the May 2026 announcement of the free 500 Mbps tier.
Microsoft Learn, Azure Arc multicloud connector documentation — the scope of AWS and Google Cloud resource discovery and management.
