Amazon and Microsoft warned that the stranglehold they have on the £15bn market for cloud computing threatens their investment in Britain. This is the latest in a series of tensions between Big Tech and regulators.
The rivals criticized , a report by Ofcom which accused it of locking its customers into deals damaging to competition.
The regulators claimed that the discounts offered to customers who rent large quantities of capacity discourage them from shopping and harm smaller competitors.
Amazon Web Services (AWS), in response, criticised Ofcom’s findings. It warned that reforming the market could leave it unable predict demand. This would “considerably impact AWS’s investments decisions.”
The company warned “that placing restrictions on discounting could have unintended consequences”, such as “dampening incentives to invest”.
AWS provides computing power for thousands of businesses that connect remotely to its data centres to store or process data.
The company has become one of the largest suppliers of Government and holds contracts worth hundreds millions of pounds each year.
Ofcom is currently consulting whether it should ask the Competition and Markets Authority to conduct a full investigation of the sector.
Amazon, Microsoft, and Google, the three US tech giants, account for over 80pc in the UK market.
Microsoft has also taken aim at the regulator. It claims that any restrictions on pricing could “very easily… make UK businesses and customers in the public sector worse”.
The report also said that a second proposal to enforce technical standards in order to facilitate switching could “chill investments”.
Ofcom warned cloud computing users that they had complained about high fees for moving data from one service provider to another.
Amazon stated that its exit fees were “transparent and clear”. Microsoft claimed that its exit fees were “transparent” and “clear”.
A spokesperson for Ofcom said: “We’ll carefully consider all opinions on our preliminary findings in our interim reports.”
The final report will be published in October.
Amazon Web Services’ spokesman stated: “The regulatory intervention proposed would be unwarranted and could result in significant unintended damage to customers and the competition.”
Microsoft has declined to provide any additional comment on its consultation submission.
Microsoft has been in negotiations with CMA for the past few months to salvage the $69bn acquisition of Call of Duty developer Activision.
The regulator initially refused to approve the deal, claiming that it would restrict competition in streaming video games. Microsoft was furious and declared that Britain is no longer a desirable place to start a tech company.
Microsoft and the CMA are currently discussing a possible restructuring which could allow for the merger to go ahead.