The Competition and Markets Authority (CMA) of the United Kingdom released its final conclusions on July 31, 2025, regarding the investigation into the public cloud services market in the UK, delivering a clear verdict: competition is not functioning properly, and Microsoft is one of the main responsible entities.
The UK authority directly blames Microsoft’s licensing practices as an obstacle to competition, particularly due to their negative impact on two of its leading competitors: Amazon Web Services (AWS) and Google Cloud. According to the CMA, Microsoft restricts the availability of certain products for these platforms and applies unfavorable conditions in terms of price and quality, significantly reducing customer choice and limiting effective use of multi-cloud architectures.
From Nubes, an initiative led by the Spanish Association of Startups to promote public policies that foster a more competitive and accessible cloud ecosystem, the recent move by the British authority has been viewed positively. “This acknowledgment of Microsoft’s restrictive practices by a competition authority should set a precedent for other authorities worldwide,” stated the organization.
Market Domination and Barriers to Innovation
The investigation reveals that the Infrastructure as a Service (IaaS) market in the UK is highly concentrated, with Microsoft and AWS controlling between 30% and 40%. Google holds below 10%. Additionally, the CMA reports that these giants have achieved sustained returns far above the cost of capital for years, a clear sign of a lack of genuine competitive pressure.
Among the most concerning aspects, the CMA highlights the existence of technical and commercial barriers preventing customers from switching providers or adopting multi-cloud models. Only 1% of customers switch providers annually, and the use of multiple platforms simultaneously remains marginal, especially among small and medium-sized enterprises. Factors such as egress fees, lack of interoperability between services, and technical complexity severely limit competition.
Licensing as a Tool for Blockade
The report dedicates a special chapter to Microsoft’s licensing practices, noting that the company prevents AWS and Google from offering certain key products—such as Windows Server, SQL Server, or Visual Studio—in comparable conditions to its own cloud, Azure. These restrictions lead to higher prices, lower service quality, and reduced competitiveness for rivals.
The CMA concludes that these practices “significantly harm the competitiveness of AWS and Google,” creating an “adverse effect on competition” (AEC). In fact, it estimates that UK customers could be paying up to 500 million pounds more annually for cloud services than in a more competitive market.
Recommendations and European Perspectives
To address this situation, the CMA has recommended designating Microsoft and AWS as entities with “strategic market status” (SMS), enabling them to be subject to specific requirements under the UK’s new digital legislation. This measure aims to preempt abuse of market power and aligns with regulatory initiatives in Europe, such as the Data Act.
Nubes calls on national competition authorities, including Spain’s CNMC and the European Commission, to carefully review these conclusions and act to safeguard competition and the rights of cloud customers. The initiative also encourages startups, independent providers, and users to share the report’s findings and demand greater transparency and fairness in cloud service access.
Frequently Asked Questions (FAQ)
What practices by Microsoft did the CMA criticize?
The CMA pointed out that Microsoft restricts AWS and Google’s access to key software licenses, prevents license portability, and applies discriminatory prices that hinder competition.
What could be the consequences of these practices for cloud service users?
These restrictions could lead to higher prices, lower service quality, and limitations on adopting multi-cloud models or switching providers easily.
What is the “strategic market status” (SMS) proposed by the CMA?
It’s a regulatory designation that allows the CMA to impose specific obligations on companies with significant market power in digital markets—like Microsoft or AWS—to prevent abuse before it happens.
Why is this decision relevant for Europe and Spain?
Because it sets a precedent in fighting anti-competitive practices in the cloud sector. Nubes urges the European Commission and national authorities to act similarly to protect local companies and foster innovation.