Microsoft cloud services set for fresh probe by UK regulator

The UK competition regulator will launch a fresh investigation into cloud services, with Microsoft once again in its sights.

The Competition and Markets Authority is still wrapping up its original extended investigation into Microsoft over its proposed $68.7bn Activision Blizzard acquisition, with concerns over the deal's impact on cloud gaming proving a key issue.

Now, Ofcom has referred the public cloud infrastructure services market to the CMA for investigation over competition concerns.

Specifically, companies such as Microsoft and Amazon will be investigated over fees and technical barriers to prevent customers changing cloud supplier, and deep discounts to price-out alternatives.

Ofcom is also said to have heard concerns about "the software licensing practices of some cloud providers, in particular Microsoft".

In a statement, CMA boss Sarah Cardell stated the growing importance of the cloud market, and the need for "strong competition" within it.

"We welcome Ofcom's referral of public cloud infrastructure services to us for in-depth scrutiny," Cardell said. "This is a £7.5bn market that underpins a whole host of online services - from social media to AI foundation models. Many businesses now completely rely on cloud services, making effective competition in this market essential."

Microsoft looks set to lean heavily on its cloud technology in its leaked plan to launch a fresh console generation in 2028 compatible with "cloud hybrid" games. The company also made headlines in 2019 for signing a secretive deal to collaborate with Sony on cloud-based tech for future platforms.

Last month, the CMA provisionally approved Microsoft's revised deal to buy Activision Blizzard (now with the streaming rights to games sliced off and sold to Ubisoft instead).

The regulator is currently taking feedback on its decision until the end of this week, 6th October, before issuing a final verdict no later than 18th October.