The UK's Competition and Markets Authority (CMA) has shared a "package of actions" in response to its Cloud Services Market Investigation.

The investigation concluded in July 2025, after just under two years of consideration, finding that both Microsoft and Amazon Web Services (AWS) held “significant market power,” and decided to further investigate if the two companies held “strategic market status" (SMS).

By designating the companies as having SMS, the CMA would be able to “impose targeted and bespoke interventions to address the concerns we have identified.”

In the latest update, shared today, March 31, the CMA has stated that Microsoft has indeed been awarded the SMS status, while AWS has managed to assuage concerns through efforts to improve interoperability and reduce cloud egress fees for UK customers.

Both Microsoft and AWS have set out actions aimed at improving vendor interoperability and reducing vendor lock-in, but the CMA said that it has heard “wider concerns about Microsoft’s position in business software – particularly productivity software, operating systems, database management and related security services. This software plays a vital role in the UK economy, underpinning modern corporate operations.”

Both AWS and Microsoft have also said they will introduce new products that directly connect their data centers to one another and to Google Cloud Platform, with “scope for further connections with other clouds to be considered.”

Sarah Cardell, chief executive of the CMA, said: “We’re using the regime in a flexible, pragmatic way to deliver real impact, as quickly as possible, for UK customers. This announcement shows we’re not just responding to today’s concerns but getting ahead of emerging issues too. Cloud remains central to our approach – we’ve seen real progress through our engagement with Microsoft and Amazon to drive meaningful improvements on egress fees and interoperability, and we expect more action from them over the coming months.

“At the same time, we’re taking action now, deciding to launch an investigation into Microsoft’s business software ecosystem. An SMS designation would enable us to tackle remaining concerns around Microsoft’s licensing practices in cloud and would also enable us to ensure a level playing field as AI is rapidly embedded into everyday business software tools.”

Alongside the CMA update, both AWS and Microsoft have shared their own posts outlining their efforts to improve competition in the UK cloud market.

AWS noted that it had been “disappointed” by the CMA’s July 2025 ruling that it should withstand further investigation, but that the company had “embraced that path.”

As a result of the ongoing conversations between AWS and the CMA, AWS has established a “UK Addendum” that aims to reduce the CMA’s concerns.

These efforts include supporting interoperability protocols including Model Context Protocol (PCP) which enables AI applications to connect with different data sources across different systems; launched the AWS Interconnect multicloud offering in November 2025 which enables the transfer of data between CSPs at a flat price and with a free tier; introducing AWS IAM Outbound Identity Federation which enables customers to federate their AWS identities to external services using tokens; and updates to the AWS Security Hub to improve multicloud capabilities.

AWS has committed to ongoing engagement with the CMA, including offering regular reports on customer usage and technology development, sharing updates on services, and assessing regulatory developments in other parts of the world and how they could apply in the UK.

Microsoft, similarly, has listed its efforts to change its practices, including offering free switching using the Microsoft Global Network, increasing the switching process with free egress from 60 to 180 days, broadening the definition of “switch” to include individual Azure services, rather than a blanket ditching of Microsoft Azure, and “at cost egress on the Microsoft Global Network for multicloud use cases.

In addition, Microsoft will establish a new, dedicated interoperability request mechanism for competing cloud providers. The cloud giant is also committed to “continuing our constructive dialogue with the CMA in a participative and future-looking way, focused on real-world market dynamics and data, and to supporting UK customers as they build, migrate, and innovate in the cloud—on Azure and beyond.”

Despite the seemingly earnest tone in the Microsoft fact sheet, the company couldn’t resist a small dig at fellow cloud providers, stating that the cloud market “remains intensely competitive, with large investments by Amazon, Google, Oracle, and new neocloud entrants and, ironically, with Google, a complainant in this review, growing faster in the last quarter of 2025 than Amazon or Microsoft.”

The “fixes” posited by AWS and Microsoft are very much on par, but while it was enough to assuage concerns about AWS’ market dominance, Microsoft hasn’t quite been able to tilt the scales.

Currently, the SMS investigation into Microsoft is set to kick off in May 2026, and will focus on the business software side, which the CMA states “plays a vital role in the UK economy” and that its “implications are significant for UK productivity, competitiveness, and value for money across the private and public sector.”

The CMA draws particularly on the growing role of AI in this, noting that “a new era of business software is underway, with AI being rapidly integrated across a wide range of applications, and cloud infrastructure supporting more flexibility and availability of these products for businesses.”

The SMS designation will hopefully enable the CMA to tackle concerns around Microsoft, but the watchdog has also reiterated that it will continue to “engage actively and review progress in cloud service”... regardless of any “designation decision.”

The CMA will review progress from the ongoing dialogue after six months.

Industry feedback on the outcome has been mixed.

Nicky Stewart, senior advisor to Google-backed advocacy group the Open Cloud Coalition, noted that the organization "welcomes" the CMA's recognition of the unfair practises, but warned that the "SMS investigation into Microsoft’s business software ecosystem must proceed without delay. We also urge the CMA to take swift action should Microsoft and AWS fail to meet their commitments on egress fees and interoperability, and to ensure those commitments are meaningful."

Similarly, UK cloud firm Civo's CEO Mark Boost said the decision regarding Microsoft was "encouraging," but that the choice to exclude AWS "raises practical concerns with both providers being structured in the same way from a structural lock-in perspective, which could create a regulatory imbalance between the two parties that would keep one side unchallenged.”

Boost added: "Voluntary arrangements made with parties outside of the SMS framework will not provide real impact, and by delaying its final decision regarding Microsoft and excluding AWS altogether, there is a risk for CMA to unnecessarily prolong uncertainty and miss an opportunity to future-proof the UK’s digital infrastructure.”

Ryan Triplette, executive director of the Coalition for Fair Software Licensing, however, has taken a more optimistic angle. Triplette noted that Microsoft's practices have been "inflicting real harm on UK businesses for years," and described the CMA's decision as "one of the most significant structural interventions to date, and provides real opportunity for UK businesses and the public sector organizations that have absorbed Microsoft's price increases, navigated its policy changes, and watched their bottom line shrink while their options narrowed. "

All voiced urgency in the need for the CMA to act swiftly and harshly to ensure real change comes through.