Cloud services: market reflection and a growth story

In 2023, the CMA commenced a market investigation into the cloud services market following a market study by Ofcom that identified initial concerns. The UK cloud services market is growing as new customers enter the market, and existing customers increase workloads. In a growing market, competition concerns could either be resolved as the market grows or become more entrenched. Intervention may only be required if new demand is not sufficiently contestable to drive competition. The question is therefore, how can a competition authority effectively address competition concerns within a growing market? 

In the recently published volume 23 of the Competition Law Journal, we co-authored a chapter, alongside economic consultants Aastha Mantri and Audrey Frankel from Economic Insight, examining each of the CMA’s theories of harms from an economic and legal perspective, and through the lens of a nascent market, highlighting the difference in responses of companies and noting the CMA’s emerging findings. We conclude that the CMA’s market investigation, and any possible remedies, should consider the nascency of the market and inputs from market participants, to ensure that intervention, if required, does not stifle current competition for new demand.

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