The UK's Competition and Markets Authority (CMA) has extended the deadline for its cloud services investigation by four months.

Previously planned to be completed by April 2025, the deadline has now been pushed to August 4, 2025.

In a statement shared by the regulator on September 19, the reason for extending the deadline is that "the inquiry group considers that completion of its investigation and the publication of its final report will not be possible within the original reference period."

While pushing the deadline back to August, the inquiry group aims to complete the investigation "as soon as possible."

Part of this has been caused by the "nature and complexity of issues," with specific attention drawn to licensing practices that were not previously examined during the Ofcom market study.

While no specific company is named, a Computer Weekly report suggests it is specifically Microsoft's licensing practices that need further investigation.

The investigation, launched in October 2023, seeks to determine if competition in the UK cloud market is working well, after an Ofcom report found that there were several features that make it difficult for customers to switch and use multiple cloud suppliers including egress fees, cloud repatriation fees, and discounts to incentivize customers to use only one provider.

Additional complaints were made about Microsoft's licensing practices, including accusing Microsoft of charging customers more for running their software in competitor's clouds.

In July 2024, Microsoft accused AWS and Google of "muddying the waters" for the investigation in its responses to the CMA's June working papers.

Details of hearing summaries emerge

The news that the CMA deadline was extended shortly follows the publication of its hearings with Amazon Web Services (AWS), Google, and Microsoft.

During the AWS hearing, which was held on July 2 with a summary published on September 16, AWS told the CMA that it "considers the competition between IT providers to be well-functioning and that cloud services meet the needs of customers both in the UK and globally in terms of pricing, innovation, product choice, variety, and quality."

The company added that it considers on-premises IT to be a competitor, and that cloud services only make up 15 percent of the IT services market as a whole.

"AWS said that the perception that once customers move to the cloud, they never return to on-premises is not correct," the summary said.

AWS reportedly gave examples of customers moving back on-premises and said that, given how hard building a data center is, the fact that companies still do it should prove "the level of flexibility they have."

The cloud provider, the largest player in the UK market and globally, said it "welcomed the opportunity" to discuss Microsoft's licensing practices.

The summary added: "AWS said that since 2019 there have been licensing restrictions imposed by Microsoft preventing customers from using previously purchased Microsoft licenses on AWS (BYOL restrictions). AWS said that this has had huge financial consequences for customers. AWS said that customers buying Microsoft products should have access to them forever and should be able to use it on the IT provider of their choice."

In terms of artificial intelligence (AI), AWS cited the number of new players that have emerged and presented additional competition to the cloud providers - likely referring to the likes of CoreWeave and other GPU cloud providers.

Microsoft similarly disputed that there were issues with competition in the cloud services market, adding that "the CMA’s emerging views on the competitive landscape and market outcomes disregard real-world evidence that the market is highly dynamic and rapidly evolving, customer satisfaction is high."

It said there are three hyperscalers, and that although Google "has not enjoyed the same level of success as AWS and Azure to date," it should not be left out of the investigation.

Microsoft said during its hearing that license fees for its software do not "materially raise costs for its competitors," adding that AWS and Google have "ample margin to compete with Azure" and therefore, licensing fees do not result in input foreclosure.

Microsoft further argued that cloud service agreements (CSA) with commitment-based discounts were necessary for competition, and to remove them would lead to UK customers paying higher prices.

The company reinforced AWS' argument that on-premises IT remains a competitor for the cloud.

Google, on the other hand, during its hearing on July 19 and also published earlier this month, said that it agrees with the CMA's view of the market, particularly "the significant market power held by AWS and Microsoft."

As the hyperscaler with the smallest market share of the big three, this take is unsurprising.

Google also reiterated AWS' criticisms of Microsoft's licensing practices, adding that "urgent and timely action is necessary to address Microsoft's practices."

Following the trend of its competitors, Google added the role that on-premises IT continues to play, with the summer stating: "Cloud providers represent a non-dominant percentage of servers that are shipped but on-premises remains the dominant estate for traditional enterprise companies."