In today’s Digest, we discuss Amazon & Microsoft’s cloud dominance harming competition, Reddit’s revenue surge on AI and ad growth, and Google losing a US appeal in the Epic Games app store case.

Amazon and Microsoft cloud dominance harms competition

Britain's antitrust regulator says the dominance of Amazon and Microsoft in cloud computing is harming competition. According to a report from an inquiry group within the Competition and Markets Authority (CMA), both tech giants hold significant shares of the UK cloud market, between 30% and 40%, and are benefiting from commercial and technical barriers that make it hard for customers to switch providers. Google, by comparison, holds a much smaller 5–10% share.

The group urged the CMA to consider whether Amazon and Microsoft should be given Strategic Market Status (SMS) in cloud services, a designation that would allow the regulator to impose stricter oversight. “Measures aimed at Microsoft and AWS would address market-wide concerns,” the group stated.

However, the CMA has already said it won’t launch new SMS investigations via its Digital Markets Unit (DMU) until early next year.

Reddit revenue surges on AI and ad growth

Reddit has reported a strong second quarter, with revenue growth driven by increased investment in advertising and data licensing, particularly through partnerships with artificial intelligence providers.

The company posted USD$465m (£353m) in advertising revenue for the quarter, accounting for 93% of its total income. The growth comes as Reddit expands its suite of AI-powered tools for advertisers, including Reddit Insights and Conversation Summary add-ons.

Reddit’s “other revenue” category which includes data licensing deals also recorded solid growth, rising 24% year-over-year to USD$35m (£27m), up from USD$28.1m (£21.7m) in the same period last year.

Google loses US appeal in Epic Games app store case

Google has lost a key appeal in its legal battle with Epic Games, with a US federal court upholding a previous verdict requiring major reforms to the company’s Play Store. The 9th US Circuit Court of Appeals in San Francisco rejected Google’s arguments that legal errors had unfairly benefited Epic Games, filed in 2020. 

Epic Games, the creator of Fortnite, accused Google of monopolising the Android ecosystem by controlling how consumers access apps and make in-app purchases. A San Francisco jury later sided with Epic, concluding that Google’s control over app distribution stifled competition.

In a statement, Google’s vice president of regulatory affairs Lee-Anne Mulholland, said the appeals court’s ruling “will significantly harm user safety, limit choice, and undermine the innovation that has always been central to the Android ecosystem.” She added that the company would continue focusing on “ensuring a secure platform as we continue our appeal.”