UK orders AWS and Microsoft to drop switching fees and loosen licensing in cloud market ruling
Enzo Reno ·
The UK Competition and Markets Authority on Wednesday ordered Amazon Web Services and Microsoft to remove data egress charges for customers that switch providers in Britain and to ease software licensing restrictions that limit rival clouds. The final order, issued in London, gives the companies nine months to comply and follows an eighteen month market investigation into public cloud infrastructure and platform services.
The ruling matters because AWS and Microsoft together account for between 70 and 80 percent of UK cloud infrastructure revenues, with Google Cloud at between 5 and 10 percent, according to Ofcom’s 2023 market study that triggered the referral. The CMA concluded that high egress fees, complex committed spend discounts, and licensing terms raised costs for customers and made multicloud strategies harder.
What the UK order changes
The CMA said the order bans network egress fees when UK customers migrate out to another provider or back on premises, and it requires clear, standardized switching terms in enterprise contracts. It also requires Microsoft to extend license portability and neutrality for on premises software such as Windows Server and SQL Server so customers can run workloads on rival clouds on equal terms, addressing complaints from European providers.
The regulator said hyperscalers must not use long term volume discounts to penalize split workloads across multiple providers and must publish interoperability documentation to enable workload portability. The CMA said it will appoint a monitoring trustee and can levy penalties for non compliance.
AWS said it would review the order and noted it already introduced a data transfer fee waiver program for customers leaving AWS in 2024. Microsoft pointed to 2023 and 2024 changes to its European cloud licensing and said it continues to engage with regulators and customers. Both companies said they support customer choice.
Industry context
Ofcom found that egress charges and committed spend discounts discouraged customers from using multiple clouds, and smaller providers struggled to win large contracts. Trade group CISPE and providers including OVHcloud and Scaleway filed complaints in Brussels about Microsoft’s licensing, and the European Commission opened a formal investigation in 2024 into alleged restrictions that favored Azure.
The Federal Trade Commission in the United States has an ongoing inquiry into public cloud competition, and state agencies have examined egress pricing in government contracts. Changes in the UK will pressure providers to offer similar terms in Europe and the United States, and could lower switching costs for AI and data intensive workloads that increasingly run across multiple clouds.