Britain's competition watchdog says it is including the public sector in its investigation into the UK cloud services market, following earlier claims that this area could be overlooked.

The Competition and Markets Authority (CMA) confirmed to The Register that these stats will contribute to its final report.

"The CMA is gathering evidence and data from the public sector as part of its Cloud Services Market Investigation, the findings of which will be published with our provisional decision in autumn 2024," a CMA spokesperson told us.

Confusion arose over the situation when a document [PDF] outlining the CMA's research collation process, using a company called Jigsaw, appeared to indicate the opposite.

The document states that while the regulator initially selected approximately 700 companies at random for its customer research, "some contacts were then excluded by the CMA before recruitment began, as they were already involved in providing information to the CMA as part of the market investigation. The decision was also made by the CMA to exclude public sector organisations."

However, The Register understands the CMA is looking to collect the evidence it requires from public sector bodies in other ways, as these customers have different ways of procuring services than businesses, such as the use of tenders.

The news follows criticism over the matter directed at the competition watchdog from Liberal Democrat peer and spokesman for the digital economy in the House of Lords, Lord Clement-Jones.

"Public sector contracts represent huge revenue streams for big tech companies, increasing their size and furthering their attempts to monopolise the market. The investigation needs to reflect the realities of the market to foster true innovation and fairness," Lord Clement-Jones said.

The peer was speaking at an event hosted by UK cloud operator Civo, which also has skin in this game, as the saying goes.

As Lord Clement-Jones notes, the big public cloud companies, particularly Amazon's AWS and Microsoft's Azure, are heavily relied upon by public sector bodies, particularly in light of the UK government's so-called "cloud first" policy that dominated procurement for much of the past decade.

"By not including cloud credits and overlooking the public sector, the CMA has missed a critical component of the competitive landscape," he added.

It was also revealed recently that the CMA itself is to double the amount it spends with AWS on its own cloud procurement over the next 36 months, at the same time as it is investigating the cloud giant for potential anti-competitive practices.

Cloud credits or committed spend discounts (CSDs) are suspected of influencing the decision of cloud buyers. These are typically agreements in which a customer commits to spend a minimum amount on a cloud provider's services over a certain period and gets a percentage discount.

The CMA reports in its working paper [PDF] covering committed spending that customers with a CSD made up a large share of the total UK cloud revenue for both AWS and Azure.

However, the CMA also claimed that many customers saw no problem with the agreements, and even that the discount was the reason they picked that provider.

AWS claimed that discounts are "pro-competitive" and "directly benefit customers," and argued that the hypothesis that CSDs can "dampen competition" by incentivizing customers to use a single provider for most or all of their needs does not hold.

Microsoft likewise said that CSDs are a key attraction for new and existing customers and thus lead to lower prices for customers in the UK.

However, The Register understands that the CMA will also be considering cloud credits as part of its assessment of committed spend agreements, so Lord Clement-Jones can sleep easier. ®

https://www.theregister.com//2024/06/12/uk_cma_says_public_sector/