Microsoft (MSFT) and Amazon (AMZN) are being targeted in a probe from the UK’s Competition and Markets Authority regulator over their dominance of the cloud services sector. This follows a report that found they control 70% to 80% of the market in the UK with Alphabet’s (GOOGL) being the next closest rival with a 5% to 10% ownership.
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The investigation into Microsoft and Amazon will be completed by April 2025. After that, the two companies may face further actions depending on if they’ve conducted anti-competitive practices in the region. Of key interest in the investigation is the difficulty customers face switching cloud service providers or using multiple of them, potentially making it harder for competition to gain new customers.
Microsoft & Amazon’s Stance on the Investigation
While both companies have agreed to work alongside the Competition and Markets Authority in this investigation, Amazon has its own complaints. It argues that the regulator’s investigation is based on “a fundamental misconception of how the IT sector functions, and the services and discounts on offer.”
Microsoft has remained much more compliant. A company spokesperson said it will ensure “the UK cloud industry remains innovative, highly competitive and an accelerator for growth across the economy.”
Microsoft vs. Amazon: Which Stock to Invest In?
With Microsoft and Amazon’s strong positions in the cloud sector, some investors might wonder which is the better stock to buy. Turning to the TipRanks stock comparison tool, traders will note both have a Strong Buy rating. However, MSFT has a higher upside potential at 14.22% compared to AMZN’s 6.78%. It also provides investors with a better dividend yield. One advantage Amazon does have is its lower share price, giving investors an easier entry point to its stock.
