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Australia’s Regulator Cautions Against Big Tech’s Hold on Cloud Services

By  |  June 23, 2025

Australia’s leading competition authority has raised fresh concerns about the market power of major global cloud computing firms, warning that their dominance could pose long-term risks to competition, innovation, and consumer choice.

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    In the final report of its five-year Digital Platform Services Inquiry, released Monday, the Australian Competition and Consumer Commission (ACCC) outlined the potential harms that could arise from the stronghold held by Microsoft, Google, and Amazon Web Services (AWS) over the nation’s cloud computing landscape.

    Per a statement from the ACCC, these “hyperscale” providers could use their significant market positions to engage in conduct that may hinder competition. This includes bundling or prioritizing their own services, inflating prices, and limiting the ability of other players to gain a foothold in the Australian market.

    According to the report, Microsoft and AWS each hold approximately 30% of Australia’s cloud services market, with Google accounting for another 20%. Collectively, these firms control 80% of the domestic sector, significantly overshadowing smaller or emerging providers. In comparison, outside Australia, other cloud service companies hold a larger 30% share of the global market, the ACCC noted.

    “Smaller or emerging providers cannot compete” under current conditions, a submission to the regulator warned, citing concerns that such concentration could stifle innovation in critical areas like generative AI.

    Read more: Britain’s Antitrust Regulator Sets Clearer Path for Big Tech Oversight

    While the ACCC acknowledged that the growth of cloud computing brings clear benefits to businesses and consumers, it also cautioned that vertical integration among digital platforms enables these companies to dominate across both cloud and AI supply chains.

    According to a statement from ACCC Chair Gina Cass-Gottlieb, unchecked control in sectors like generative AI could “hamper innovation, result in lower quality products and services, and force Australian businesses and consumers to pay more.”

    These findings come amid projections that Australian organizations will spend nearly $26.6 billion on public cloud services in 2025, an 18.9% increase from the previous year, per data cited from research firm Gartner.

    The report also arrives on the heels of AWS’s announcement that it plans to invest $20 billion in local data centre infrastructure between 2025 and 2029. The tech giant, which in 2024 was entrusted with hosting ‘Top Secret’ Australian national security and defense data, framed the expansion as a commitment to supporting Australia’s digital transformation. However, according to some local cloud providers, such large-scale investments by dominant providers may deepen competitive barriers and raise issues around data sovereignty.

    The ACCC emphasized the need for stronger regulatory oversight, particularly in fast-moving technology sectors. The regulator urged that a digital competition framework proposed by the federal government in December 2024 should be equipped to track and respond to emerging risks tied to new technologies, such as generative AI.

    The report concludes the ACCC’s multi-year inquiry into digital platform services, a process that has closely examined the competitive dynamics of Australia’s online economy.

    Source: ACS