The UK Competition and Markets Authority (CMA) concluded on 31 July 2025 that competition in cloud services was not working well. It found that Microsoft’s software licensing practices weakened AWS and Google Cloud as competitors, alongside wider problems including concentrated markets, high switching costs and barriers to using multiple providers. The decision was a market-investigation finding of adverse effects on competition—not a criminal conviction or a ruling that Microsoft is a legal monopoly.
What the CMA found about cloud competition
The CMA’s final decision followed a market investigation referred by Ofcom in October 2023. It identified several features of cloud services that, together, limit competitive pressure: concentrated supply, obstacles to entry and expansion, difficulty switching or combining providers, and Microsoft licensing terms that disadvantage rival clouds.
The CMA also recognised that cloud services have brought benefits, including quality, innovation and discounts. Its finding does not mean every customer is affected in the same way; it means that market features and conduct can reduce customer choice and make it harder for rivals to compete.
Market shares and customer spending
The CMA’s market-share figures below use its UK+EEA market definition and refer to 2024 supply. They are ranges because the underlying data are commercially sensitive. Ofcom’s separate 2022 figure covers UK public-cloud infrastructure revenue, so it should not be treated as directly comparable to the CMA’s 2024 supply figures.
Recommended Free Tools
#1 Best Overall
| Measure | Provider or market | Figure | Source and scope |
|---|---|---|---|
| IaaS supply, 2024 | Microsoft | 30–40% | CMA, 2025; UK+EEA market definition |
| IaaS supply, 2024 | AWS | 30–40% | CMA, 2025; UK+EEA market definition |
| PaaS supply, 2024 | Microsoft | 20–30% | CMA, 2025; UK+EEA market definition |
| PaaS supply, 2024 | AWS | 10–20% | CMA, 2025; UK+EEA market definition |
| IaaS and PaaS supply, 2024 | 5–10% of each | CMA, 2025; UK+EEA market definition | |
| UK public-cloud infrastructure revenue, 2022 | AWS and Microsoft combined | 70–80% | Ofcom, 2023; UK market |
| Customer cloud-services spending, 2024 | Market total | £10.5 billion | CMA, 2025 |
| Growth in customer cloud-services spending | Market total | Nearly 30% each year since 2020 | CMA, 2025 |
IaaS (infrastructure as a service) provides computing, storage and networking resources; PaaS (platform as a service) provides platforms and tools for developing or running applications. The CMA said the leading IaaS positions of Microsoft and AWS appeared likely to endure and that both had sustained returns above their cost of capital.
Why switching providers or using more than one cloud can be difficult
Fewer than 1% of customers switch cloud provider each year, according to the CMA’s 2025 decision. That low rate matters because customers who cannot readily move workloads have less leverage when negotiating, and rivals have fewer opportunities to win established business.
- Data-transfer costs: Egress fees—charges for transferring data out of a cloud—can make moving stored data expensive.
- Technical differences: Providers use different interfaces and services, so applications and processes may need changes to operate elsewhere.
- Performance constraints: Latency and the location of data or workloads can complicate plans to divide services across providers.
- Skills and visibility: Skills shortages and limited transparency can make it harder to estimate costs, manage multiple environments and plan a migration.
These obstacles are related but distinct. A business may find it technically possible to use two clouds yet still face additional cost and operational work; conversely, a migration can be difficult even where a contract allows it. The CMA identified egress fees and interoperability barriers as factors that weaken multi-cloud use and customer bargaining power.
What the CMA said about Microsoft software licensing
The CMA examined Microsoft products including Windows Server, SQL Server, Windows 10 and 11, Visual Studio and productivity suites. It found significant price and/or quality differences when these products were used on Azure compared with AWS or Google Cloud. It also found that some licences were unavailable to rival providers and that existing licences generally could not be brought to AWS or Google.
The Tool Desk
Outbyte Driver Updater FREEScan for outdated or missing drivers - takes under a minuteDriver Scan →Outbyte PC Repair FREERepair Windows errors before they cause bigger problemsFix Now →Rank #3
- Your Personal Streaming Server - Build your own Netflix-style media library and stream 4K movies, shows and photos to any device without monthly fees
- Create Your Own Cloud - Store your entire photo, video and music collection; access from anywhere with fast 282 MB/s transfer speeds
- Creator-Grade Backup Solution - Protect your irreplaceable content with automated backups to cloud services, external drives and remote NAS
- Multi-Layered Data Protection - Combine RAID redundancy, automated backups and snapshot technology to prevent data loss from any cause
- Smart Home Surveillance - Support up to 30 IP cameras with AI detection, instant alerts and secure remote monitoring
In the CMA’s assessment, these practices weakened the competitive constraint that AWS and Google could place on Microsoft. The finding is about the effect of licensing on competition between cloud providers; it does not establish that every customer pays more on a rival cloud or that every Microsoft licence has the same restriction.
Is Azure a monopoly in the UK?
The CMA’s decision does not say that Azure is a legal monopoly. Its 2025 figures put Microsoft at 30–40% of IaaS supply under the CMA’s UK+EEA definition, alongside AWS in the same 30–40% range. The CMA’s conclusion was that competition across cloud services was not working well and that particular market features and Microsoft licensing practices had adverse effects on competition.
“Adverse effects on competition” is a market-investigation conclusion, not a criminal conviction. It describes conditions or practices that reduce competitive pressure, customer choice or rivals’ ability to expand. It is not a finding that all customers have suffered the same harm.
What has changed since the 2025 decision?
CMA engagement on egress fees and interoperability
On 31 March 2026, the CMA announced a package covering cloud and business software. It said Microsoft and Amazon had taken material steps on egress fees and interoperability following CMA engagement, while warning that more was needed to help UK customers use multiple providers and switch. The CMA said it would continue engagement and review progress after six months.
What’s actually slowing this PC down?
Pick the symptom - the matching free tool is one click away.
Best Value
- COMPATIBILITY: Specially designed to mount Ubiquiti UniFi Cloud Gateway models UCG-Ultra and UCG-Max securely in place
- RACK SPECIFICATIONS: Standard 1U height rack mount bracket engineered for 10-inch rack installations, offering efficient space utilization
- MOUNTING SOLUTION: Provides stable and secure placement for your UniFi Cloud Gateway UCG Max or UCG Ultra device in server room or network cabinet setups
- PACKAGE CONTENTS: Includes one (1x) 1U 10-inch rack mount bracket specifically designed for UniFi UCG Ultra & UCG Max Gateway installations
- INSTALLATION: Purpose-built bracket ensures proper device positioning and reliable mounting in standard 10-inch rack environments
Separate investigation into Microsoft’s business software
The same announcement launched an investigation into whether Microsoft should be designated with strategic market status (SMS) in business software. On 14 May 2026, the CMA published the investigation scope: productivity software, personal-computer and server operating systems, database management and security software. The CMA said the investigation had to be completed within nine months and expected to decide whether to designate Microsoft by February 2027.
SMS designation is not itself a finding of wrongdoing. If the legal tests are met, it can give the CMA powers to consider targeted conduct requirements or pro-competition interventions. The SMS investigation concerns a broader business-software ecosystem; it is distinct from the 2025 cloud-market decision.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How to assess cloud options as a business
The CMA’s findings point to practical questions to answer before choosing a provider or planning a migration. The right comparison depends on workloads, existing licences, contract terms and technical needs; the market-share figures alone do not show which provider is cheapest or best for a particular business.
- Compare the workload-specific cost of running Microsoft software on each provider, including licence eligibility and any restrictions on portability.
- Model data-transfer charges and the cost of moving data both into and out of a provider.
- Check which applications and tools can work across providers, and estimate the engineering and operational effort required.
- Account for latency, service dependencies, available skills and the breadth of services your workload needs.
- Review contractual commitments and the practical steps required to exit or divide workloads, not just whether a contract permits it.
Google Cloud supported the CMA’s provisional licensing analysis in a February 2025 submission and argued that Microsoft used power in software markets to foreclose AWS and Google Cloud. Microsoft disputed the provisional analysis, objected to being singled out and argued that UK customers had made limited complaints about competition. Those are the companies’ stated positions, not independent findings; the CMA’s final decision is the regulator’s conclusion.
Windows Errors? Fix Them Before They Spread
Repair common Windows errors and clear accumulated junk for a smoother, more stable PC - no reinstall needed.Free scan · no reinstallOutdated Drivers Are Slowing You Down
One free scan finds every outdated or missing driver and matches the right update for your exact hardware.Free scan · exact hardware matchWhat to watch next
The next major milestone identified by the CMA is its expected decision by February 2027 on whether to designate Microsoft with SMS in business software. Separately, the CMA said it would continue engaging with Microsoft and Amazon on egress fees and interoperability and review progress after six months. These are different processes: the first is a statutory SMS investigation, while the second concerns practical steps on cloud switching and multi-cloud use.
Quick Recap
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
