Britain's market watchdog criticized for not creating the conditions for competition to thrive
UK businesses say the market power of Big Tech is stifling competition, and will hinder the UK’s ability to reap the benefits from AI, a key part of the government’s plans for economic recovery.
A report [PDF] from the Institute for Public Policy Research (IPPR) points out that a handful of companies hold almost total control over the digital infrastructure relied on in Blighty, and warns that we risk letting AI become monopolized in the same way unless more pro-competitive measures are introduced.
A survey conducted for the report found 79 percent of UK businesses relying on digital platforms are concerned about Big Tech using their dominance to limit competition. They rank this as a bigger constraint on their growth than access to finance or talent, according to the IPPR.
So we are in no doubt about which tech giants are being referred to, the report points out that Google handles more than 90 percent of UK internet searches, Microsoft and AWS each control 30 to 40 percent of customer spending on cloud services (Google takes another 5 to 10 percent), and Microsoft is also being investigated for its dominance in business software.
The report is highly critical of the UK’s official market regulator, the Competition and Markets Authority (CMA), almost accusing it of allowing the global tech giants to maintain their dominant position in Britain’s technology market.
“Over the past two years, senior officials have resigned or been sacked from the CMA, and in interviews they describe a collapse in ministerial support for their work. In 2025, the government explicitly asked the regulator to prioritise inward investment (DBT 2025), which was widely interpreted as a call to go easy on ‘big tech’. And subsequently, multiple investigations have led to voluntary commitments rather than binding rules, despite evidence of harm,” it states.
As The Register reported earlier this year, the chair of the CMA’s cloud inquiry quit, citing the glacial pace of implementing reforms and saying the independence of the agency was at risk. This came just weeks after the CMA appointed Doug Gurr, a former Amazon veteran, as permanent Chairman at the agency.
In fact, the IPPR recommends the government develops an updated strategic steer for the CMA, to encourage it to be more proactive, rapid and bold in its enforcement. Greater emphasis is needed on interventions that genuinely boost growth, it claims, saying the CMA has so far done little to create conditions where competitors thrive, even though these conditions may deliver growth and sovereignty.
The report warns the stakes are becoming even higher with the rapid growth of AI. The technology is central to the government’s plans for future growth, as laid out in the AI Opportunities Action Plan, introduced at the start of last year.
But UK investment in home-grown AI firms risks being undermined when they depend excessively on infrastructure controlled by overseas technology giants, the IPPR says.
The AI industry is already highly concentrated, with Nvidia dominating the accelerator market, and the hyperscalers largely controlling access to AI infrastructure via their cloud platforms.
Microsoft, Google and Amazon have collectively invested in excess of $20 billion in the major AI developers, causing the CMA and the US Federal Trade Commission to flag these partnerships as a risk.
If AI ends up becoming a monopoly (or oligopoly), the UK’s leverage will likely be tiny and its financial returns constrained, the IPPR says.
“Big tech dominance is holding back British businesses, limiting competition and making it harder for new firms to innovate and grow,” claims IPPR senior research fellow and report author Roa Powell.
