Are Clouds Too Sticky? Antitrust Authorities Probe Lock-in Pricing Complaints

December 15, 2025

Amazon Web Services, Microsoft Azure, and Google Cloud draw attention over egress fees, spending minimums, bundled licensing.

Antitrust enforcers in the United States, United Kingdom, and European Union have opened investigations into the pricing and contractual practices of major cloud service providers, citing concerns that certain terms may restrict competition and lock customers into long‑term arrangements.

The Federal Trade Commission is examining whether practices such as data egress fees, long‑term spending commitments, and bundled licensing agreements make it difficult for customers to switch providers. The agency began collecting information in 2023 and expanded its inquiry in 2025 after complaints from technology startups about opaque billing and technical lock‑in.
In Britain, the Competition and Markets Authority concluded a two‑year market investigation in July 2025, finding that Amazon Web Services and Microsoft Azure each control between 30% and 40% of U.K. cloud spend, while Google Cloud trails in the single digits. The CMA reported that egress fees, incompatible architectures, and restrictive licensing terms contribute to a “lock‑in” effect and recommended further enforcement under new U.K. tech rules, including potential Strategic Market Status designations.
The European Commission is conducting a parallel review under the Digital Markets Act, assessing whether Azure and AWS should be designated as “core platform services” subject to obligations around interoperability, data portability, and restrictions on bundling. The Commission also opened a sector‑wide antitrust probe in October 2025 focused on egress fees and related contractual provisions.

Market Context

Global market estimates portray a concentrated cloud infrastructure market involving just three hyperscalers. AWS captures roughly one‑third of worldwide cloud infrastructure spending, with Microsoft near 23% and Google near 11%, according to industry trackers cited by CIO Dive in late 2023 and updated in subsequent reporting. In the U.K., the CMA’s 2025 final report estimated AWS and Azure each at 30–40% of spend, with Google at 5–10% and other providers in low single digits.

The CMA also found customers rarely switch providers—less than 1% annually—and that multicloud adoption remains limited among small and mid‑sized enterprises, reinforcing the practical effect of switching costs and licensing frictions.

What are antitrust authorities examining?

Government competition law enforcers are focusing on:

Data egress fees charged for transferring data out of a cloud environment, which can make provider switching prohibitively expensive. The CMA devoted multiple working papers to egress fees and found they contribute to lock‑in; the EC’s probe similarly centers on egress costs.
Discounts tied to long‑term commitments and minimum‑spend agreements, which can function like exclusive‑dealing incentives in practice and disfavor smaller firms with limited bargaining power, according to FTC.
Bundled licensing and proprietary services—including software licensing arrangements that raise costs on rival clouds. The CMA singled out Microsoft licensing practices as a barrier to running Microsoft workloads on competing clouds.
Opaque billing and unilateral pricing changes, which startups say undermine budgeting and increase dependency on a single provider, says the FTC.

What are the companies saying?

The hyperscalers dispute the characterizations. As reported by CNBC, Microsoft said the CMA’s decision “misses the mark,” calling the cloud market “dynamic and competitive” and arguing the competition agency under estimates Google’s growth. Amazon characterized recommendations for further probe as “unwarranted,” warning they could make the U.K. a regulatory outlier. Google welcomed the CMA’s push, calling it a “watershed moment” for fair pricing and choice.

AWS has argued that data transfer‑out fees reflect substantial investment in its network and that price controls would have “harmful, unintended consequences.” It also told the CMA it has eliminated these fees globally for switching customers, which it says removes a core concern around exit costs.

Is there an artificial intelligence competition angle?

Artificial intelligence services are a focal point for competition authorities. Startups building AI apps report cost opacity and lock‑in risks when scaling on hyperscaler platforms, and internal industry reporting has described AI firms delaying traditional AWS adoption and shifting early budgets to AI‑specific tools and alternative GPU clouds, according to Business Insider. The FTC’s inquiry into cloud–AI partnerships seeks details on equity stakes, revenue‑share rights, and any cloud‑spend commitments embedded in those agreements.

What are competition analysts saying?

Some scholars caution against over‑broad remedies. In comments to the CMA, the International Center for Law & Economics said concentration is not a reliable proxy for harm and warned that designating firms with Strategic Market Status could be “disproportionate and unsupported by the evidence.”
Gary Biglaiser, a University of North Carolina at Chapel Hill professor, is recognized for his research on industrial organization, market structure, and regulatory economics. His work examines how firms use contractual tools like egress fees to shape competition and consumer outcomes. In a January 2025 study, Biglaiser and co-authors found that cloud providers have strong incentives to impose egress fees; while banning or capping these fees could increase consumer surplus, it may also drive providers to introduce alternative switching costs, complicating regulatory decisions.
Industry voices also push back on intervention. Matt Johnson, CEO of Rayo, a London-based cloud, data, and AI consultancy that partners with AWS, argued that major hyperscalers now offer straightforward exit programs and that while complexity remains, “that is an attribute of architecture,” not deliberate traps, adding that multi‑cloud choices create competitive discipline without regulatory mandates.”

Have egress obstacles been addressed before?

The investigations evoke past episodes where exit penalties and bundling drew antitrust scrutiny. Regulators have long examined termination fees in telecom and broadband contracts for discouraging switching; today’s egress fees play a similar role by raising the price of leaving a service, according to Biglaiser, et al. The debate over bundled licensing and interoperability echoes the late‑1990s concerns about operating‑system tied products, though the current focus is on cloud infrastructure and enterprise software migration rather than desktop dominance. The DMA’s data portability requirements also parallel earlier consumer‑protection measures intended to ease switching—whether between mobile carriers or digital platforms—and signal a regulatory preference for technical neutrality so businesses can move workloads without punitive costs, according to EC statements.

What comes next?

The CMA has closed its market investigation but recommended advancing strategic market status probes for AWS and Microsoft. The European Commission continues DMA assessments, and the FTC is building its record through public comments and study under its authority to demand detailed reports from companies for research—not enforcement. Potential remedies range from limits or transparency mandates on egress fees to fair‑use licensing obligations and portability standards.

Lock-in agreements and exclusive dealing arrangements—whether with suppliers or sellers—can significantly harm competition by foreclosing rivals from critical inputs or distribution channels, reducing consumer choice, and entrenching dominant firms.

Companies are attracted to the obvious benefits of such arrangements, but they create artificial barriers to entry, enabling incumbents to maintain market power and suppress innovation. Detecting this type of conduct is challenging because agreements are embedded in complex and private contractual terms, disguised as efficiency-driven partnerships, and require granular market data analysis to uncover foreclosure effects.

Antitrust law enforcers, public or private, must prioritize rigorous economic analysis, demand transparency in contractual disclosures, and leverage subpoena power or discovery tools to uncover hidden exclusivity provisions. Proactive monitoring and investigation into high-risk sectors – as the agencies discussed here are undertaking in the tech and cloud world – are essential to mitigating these anticompetitive risks.

Want to dive deeper?

For readers who want to explore the official documents and announcements behind these investigations, here are direct links to primary sources:

Edited by Tom Hagy, Editor-in-Chief, Mogin Law Blog.

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