The Competition and Markets Authority has designated Microsoft for a Strategic Market Status investigation covering its cloud and business software ecosystems, while stopping short of applying the same scrutiny to Amazon Web Services. The regulator simultaneously secured voluntary commitments from both Microsoft and AWS to reduce egress fees and improve interoperability for UK customers.
The split decision has drawn sharp reactions from UK cloud providers and independent vendors who had urged the CMA to treat both hyperscalers equally. Critics argue that AWS and Microsoft operate structurally similar lock-in models — bundled credits, complex egress pricing, restricted interoperability — and that regulating one without the other risks creating an uneven playing field rather than genuine competition.
The CMA's decision is a decisive step toward tackling long-standing barriers like complex and unpredictable pricing, high fees, and contractual lock-in that limit customer choice. Cost predictability is fundamental to cloud economics, yet our data shows 46% of UK businesses have overspent their cloud budgets in the last year.
Wasabi, which collaborated with the CMA during the investigation, welcomed the intervention but emphasised that transparency measures must extend across the market. The company pointed to AI-driven data growth as an accelerating factor: as organisations become more dependent on cloud-hosted data, the cost and complexity of moving between providers becomes an increasingly material commercial constraint.
The decision to exclude AWS raises practical concerns — with both providers being structured in the same way from a structural lock-in perspective, which could create a regulatory imbalance between the two parties that would keep one side unchallenged.
Boost, whose UK sovereign cloud company was recently cited in a Westminster Hall debate on technology sovereignty, argued that voluntary arrangements made outside the SMS framework lack enforceability. He called for an integrated regulatory approach, warning that partial regulation could undermine the UK's digital sovereignty objectives and delay meaningful market reform.
The CMA's SMS investigation into Microsoft may take up to nine months. In the interim, both hyperscalers' voluntary commitments will be monitored but carry no statutory penalties for non-compliance — a gap that industry observers expect to become a focal point as the process unfolds.
