Delays in regulatory action to deal with imbalances in the market for cloud services has prompted the resignation of the chair of an inquiry into the market.

Companies deploying cloud services are being hampered by the dominance of Microsoft Azure and Amazon Web Services, a situation exacerbated by the glacial pace in which the UK’s Competition and Markets Authority (CMA) is reacting to the recommendations of its own inquiry into the cloud industry.

Now the chair of that inquiry, Kip Meek, has quit the role in protest at the lack of action. Earlier this week Meek told AI publication The Morning Intelligence, the first to report his resignation, “I shared concerns at the time that the CMA was taking a long time to pick up the recommendations of our report. I’m still concerned that the pace is going slowly.”

Although the CMA only monitors UK markets, its investigation has been closely watched by regulators and industry bodies in other countries, including the Federal Trade Commission in the US and others in Europe.

Concerns about the delay in dealing with the situation were echoed by industry figures on both sides of the Atlantic. “Glacial pace is about right. Every month that goes past without something happening, the two big guys are going to get more and more entrenched. How can it make nine months to decide to what to do? It’s still nowhere near resolution,” said David Terrar, CEO of the Tech Industry Forum.

Transatlantic concerns

The frustration was also felt by Nicky Stewart, senior adviser to the Open Cloud Coalition. “All of this was kicked off back in October 2022, when the state of the cloud industry was referred to the CMA. We’re now three-and-a-half years into the process and nothing is happening. Microsoft and AWS still have between 70% and 90% of the cloud market between them,” she said.

“The report that the CMA produced was a really comprehensive one, completely understanding the nature of the industry. We’ve been at the sharp end of uncompetitive behavior for some time,” she added.

And concerns have also been expressed in the US. “Kip Meek’s resignation highlights a stark reality: Diagnosing a potentially flawed, highly concentrated cloud market is useless if the watchdog lacks the urgency to address it. Right now, the hyperscalers are operating business-as-usual while the CMA hits the snooze button,” said Dave McCarthy, research vice president at IDC.

Regulators across the globe are currently investigating the cloud market. Last month, the US Federal Trade Commission opened an investigation into Microsoft’s position and whether it had an unfair advantage against other cloud competitors. And in November last year, the European Commission opened three market investigations on cloud computing services under the Digital Markets Act (DMA), including an investigation as to whether  the DMA can effectively tackle practices that may limit competitiveness and fairness in the cloud computing sector in the EU.”

Stewart highlighted the EC’s action. “The commission kicked off three inquiries last autumn and they’re due to make an interim report in May or June. They may well get there before the CMA, which started three years earlier,” she said.

The situation needs to be resolved quickly given the increasing importance of AI in today’s market and the need for competitive cloud services to support it, said Terrar: “AI, particularly agentic AI, is going to change the cloud market. We’re going to see some changes, for example, more processing at the edge, and the cloud infrastructure is so fundamental to the industry today.”

And, of course, there’s the additional cost, said Stewart: “There was a footnote in the CMA report that the UK is paying about £500m too more for cloud, because of the dominance of the big players: there’s a need for more competition.”

Regulatory foot-dragging

McCarthy also highlighted the impact on enterprises. “For enterprise users, this regulatory foot-dragging has tangible impacts. When dominant players face no immediate threat of intervention regarding egress fees or restrictive software licensing, customers are stripped of their negotiating leverage,” he said.

There are signs that the governments around the world are changing. “It’s not just Europe and the US that are acting against the dominant players; we’ve seen governments in South America and South Africa looking into it too. People are waking up and smelling the coffee,”

The CMA has said that a decision on cloud will be made by the end of this month. It’s fair to say that a lot of the industry won’t be expecting immediate changes.

This article first appeared on Networkhttps://www.networkworld.com/article/4141107/lack-of-regulatory-action-on-hyperscaler-dominance-prompts-inquiry-chair-to-quit.html World.