Competition in the cloud

A version of this article originally appeared in French in L’Opinion. 

On 28 January, the Competition Market Authority (CMA) published its preliminary results on the state of competition in cloud services in the UK. The conclusion is clear: competition is not unfolding as it should.

The stakes of this investigation are first and foremost British. The £9 billion cloud market is growing rapidly, at a rate of 30% per year. In fact, the CMA notes that competitive dysfunctions penalise end consumers, businesses, but also British public services. Cloud services that are too expensive because they are insufficiently competitive erode the purchasing power of households, increase business costs, weigh on the authorities that use these services and tend to deteriorate public finances.

Let us strive to be cautious here. The case has not been definitively decided. Microsoft, which the CMA suspects of using its dominant position in software to make it more difficult to switch suppliers, will have the opportunity to defend itself. The stakes are high. Because before AI monopolised people's minds, it was largely through the cloud that Microsoft made a tremendous comeback in recent years. Sorrowful minds would point out that the behaviour in question here is of the same type that triggered the first major investigation by the European Union 20 years ago.

In any case, and without prejudging the results expected next summer, the true dimension of this affair goes beyond its protagonists. The CMA intends to be a clear leader in digital regulation.

This is the case with the United States under Donald Trump. Mr. Zuckerberg's statements on the use of competition law, deemed opportunistic and discriminatory against American companies, would seem to attest to a hardening on the other side of the Atlantic. This is nothing new, however. The Trump administration is in fact following in the footsteps of its predecessors. In February 2015, Barack Obama criticised European competition law in terms almost identical to Mr. Zuckerberg. The CMA, pointing to Microsoft, seems unafraid to test the "special relationship" with America.

But the CMA's message is mainly addressed to the EU. Because despite the British-European agreement of 29 October 2024 on cooperation in the area of competition, the CMA does not intend to follow the EU. Quite the contrary in several ways.

First, it implicitly questions the EU's willingness to move forward where Europeans do not really know how to manage the Trump administration whose return they did not anticipate. Above all, the EU is also wondering about competition in the cloud in its market. Following in the footsteps of the CMA, several players sent a complaint to the Commission last autumn, on the same grievances as those raised in the United Kingdom, asking it, as the CMA does, to open an investigation, this time in the European market. The decision is imminent and one the Commission cannot ignore. In France, parliamentarians have also raised the issue and are wondering what the Competition Authority will do.

Second, and more deeply, the British and Europeans are beginning to test their approach to net regulation through this survey on the cloud. With the Digital Market Act, the EU has chosen a path based on a priori control of gatekeepers. The UK, through the Digital Markets, Competition and Consumers Act (DMCCA) which came into force on 1 January 2025, is making a point of proposing another type of digital regulation, in line with the British spirit, marked by more flexibility.

In the end, the UK's action on cloud competition is not anecdotal. It marks a first step in a long confrontation between the British vision of post-Brexit competition regulation on the one hand, and the implementation of the legal cathedral that is the DMA by the EU, on the other hand. A sign that the competition authorities must also accept to be in competition.

Bruno Alomar, former senior official at the European Commission, is a senior advisor at FIPRA and author of Reform or Oblivion: 10 years to save the European Union (2018).