In a move reminiscent of David’s fight against Goliath, Spain’s National Commission of Markets and Competition (CNMC) has initiated a study to evaluate the possible formation of an oligopoly by American tech giants in the cloud services sector. Microsoft (with Microsoft Azure), Amazon (Amazon Web Services – AWS), and Google (Google Cloud Platform) are the focus of this regulatory analysis, amid suspicions of practices that could be anti-competitive.
The formation of this cloud services oligopoly is perhaps more than evident, although many may deny it, as the big cloud companies supposedly shower new (and not so new) customers with millions of dollars in credits to supposedly trap them in their services under the guise of marketing actions or rewards, while also beginning to suffocate all competition, not only in Europe but worldwide.
But far from wanting to actually do something, Europe and the CNMC continue to hire services from these companies to the detriment of European companies that can cover them without any problem. An example of this is the European choice of Oracle Cloud instead of using local businesses to promote European technological development.
The CNMC seeks to delve into the functioning of a market considered essential for digital transformation. Its goal is to promote a competitive environment that fosters competition in prices, quality, and innovation. According to preliminary data, around a third of companies in Spain (30%) already use these services to manage data remotely.
The Spanish public body will analyze aspects that could be limiting the efficient functioning of the sector. Among the points of friction identified in a preliminary analysis are the trend towards concentration in a few operators and the difficulties in changing providers.
This study adds to similar efforts by international organizations, such as the UK’s Competition and Markets Authority (CMA), which is also investigating the sector with the expectation of concluding its study in 2025. In the British market, Microsoft and Amazon dominate with almost 80% of the market, followed at a great distance by Google.
The CNMC invites individuals with relevant information to collaborate with its Subdirectorate of Studies and Reports of the Competition Promotion Department. This initiative is part of the Strategic Plan 2021-2026 and Action Plan 2023 of the CNMC, which includes among its objectives the promotion of digitalization and the conduct of studies in this field.
The CNMC’s oversight of these tech giants reflects the growing global regulatory concern about market concentration and competition in the tech sector, especially in such a crucial area as cloud services, which are essential for digitalization and business competitiveness.