Amazon’s £8B UK Cloud Investment May Create 14,000 Jobs Annually — Regulators Are Watching Closely

Key Takeaways

• The U.K.’s finance minister has announced that Amazon Web Services (AWS) plans to invest £8 billion ($10.47 billion) in the country over the next 5 years.
• The planned investment is estimated to create an additional 14,000 jobs for the U.K. economy.
• AWS is subject to an ongoing antitrust probe by the Competition and Markets Authority (CMA).

On Wednesday, Sept. 11, U.K. Chancellor Rachel Reeves announced that Amazon Web Services (AWS) intends to invest £8 billion ($10.47 billion)  in the country over the next 5 years.

However, the firm’s plans for the U.K. are threatened by an ongoing antitrust probe that is investigating AWS and other hyperscalers’ dominance in the market for cloud services.

Amazon’s £8B U.K. Investment

According to a government statement , the planned investment will be directed toward AWS’s data center supply chain. The statement added that the company’s various construction, facility maintenance, engineering, and telecommunications contractors will benefit from the fresh spending. 

The planned investment is estimated to support around 14,000 jobs per year across the U.K. and contribute £14 billion to the U.K.’s total Gross Domestic Product (GDP) from 2024 to 2028.

“This £8 billion investment marks the start of the economic revival and shows Britain is a place to do business,” Reeves stated. “I am determined to go further so we can deliver on our mandate to create jobs, unlock investment, and make every part of Britain better off.”

While the deal suggests AWS is betting on its continued growth in the U.K. market, the company faces some regulatory headwinds.

Competition Watchdog Investigates U.K. Cloud Market 

Amazon’s latest investment plans come amid the Competition and Markets Authority (CMA) probe into the U.K. cloud services market.

The investigation was initially launched at the request of the media regulator Ofcom, which expressed  concerns that high data transfer fees and technical restrictions made it difficult for customers to switch cloud providers or use multiple providers.

In its latest report  on the ongoing probe, the CMA said, “There are indicators of significant market power being held by the largest two providers, AWS and Microsoft.”

A provisional decision on any potential remedies is expected  in September or October 2024. A final decision will be published no later than April 2025. 

Potential Outcomes

If the CMA finds evidence of anti-competitive practices, it might recommend regulatory measures to address these issues. This could include imposing conditions on market leaders to promote competition, such as requiring them to open their platforms to other providers.

Another potential outcome is that the CMA imposes fines on companies found to be engaging in anti-competitive behavior. 

Finally, the regulator could recommend structural remedies, such as requiring AWS or Microsoft to divest certain assets or businesses to reduce their market concentration and foster a more competitive environment.

About the Author

James Morales

Although his background is in crypto and FinTech news, these days, James likes to roam across CCN’s editorial breadth, focusing mostly on digital technology. Having always been fascinated by the latest innovations, he uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.

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