AWS claims that Microsoft Azure is using prohibitively high licensing costs to retain cloud customers that would otherwise migrate to competing cloud platforms.

Microsoft, rebutting this claim, said that egress fees are not in fact a significant factor for customers, pointing out that customer switching was low even when fees were removed due to the EU Data Act.

These claims and counter claims were aired as part of UK’s Competition and Markets Authority’s (CMA) Cloud Services Market Investigation. The CMA is a UK governmental department charged with promoting competitive markets and prohibiting unfair business practices. The current investigation dug into the nature of the UK cloud market to determine if there are unfair competitive practices.

Summaries of the hearings with Microsoft, Google and AWS reveal a competitive landscape in which Microsoft, based on the CMA’s recent finding, has the capacity and a business incentive to “partially foreclose AWS and Google” by strategies involving its popular software products, and as a result, this is “harming competition in cloud services.”

The CMA has a point: Microsoft classifies Google and AWS as “listed providers,” and so customers who runs Microsoft software in these competing cloud platforms have to pay, in some cases, up to four times as much as they would on Azure.

Google, for its claim in the inquiry, agreed that Microsoft has taken advantage of its licensing power, and that the Azure platform could dominate the UK cloud sector “if nothing changes.”

Microsoft vigorously defended its strategy, claiming that for competing cloud players to urge the CMA to “intervene and constrain the price” that Microsoft charges to license its software hosted on the competing cloud platforms would be “extraordinary and unprecedented.” Furthermore, the only vendors gaining advantage in this case would be Google and AWS, Microsoft argued.

Further Microsoft rebuttals appeared to land a blow on the practices of its competitors. In particular, the software giant suggested that the CMA examine how Google licenses its products such as Looker, Google Analytics and BigQuery, or how AWS licenses its popular Aurora, S3 and DynamoDB solutions. “Do AWS and Google license their proprietary software to their competitors, at any price at all? They do not,” Microsoft said. “You can see how we might feel unfairly singled out.”

Additionally, Microsoft claimed that Google has “sunk thousands, if not millions, of dollars to stand up and support ‘trade associations,’ who unsurprisingly parrot its claims to competition authorities and government officials.”

The deadline for the CMA to issue its final report is August of 2025. In the meantime, the group’s findings provide an overall portrait of the UK cloud market. The CMA report noted that the British infrastructure as a service (IaaS) cloud market is dominated by AWS, with a 40-50% share, followed closely by Microsoft, with a 30-40% share. Google has a far smaller share, with a percentage not specified, and that IBM and Oracle hold a still smaller share.

Arguably the CMA’s most significant finding—one that also reflects on the U.S. cloud market–is that the extensive product portfolio offered by cloud giants are “likely to contribute to barriers to entry” for other vendors. As a result, AWS and Microsoft “hold significant unilateral market power in these markets. This harms competition in cloud services in the UK because it is harder for alternative cloud suppliers to enter and grow in these markets, and customers face a limited choice of suppliers.”

In other words, for the foreseeable future the two existing market leaders hold a dominant grip on the all-important enterprise cloud market.