The collaboration between British banks and major US cloud providers is a contentious issue.
- Gordon McArthur, CEO of Beeks, highlights potential risks.
- Concerns arise over data security and competitive conflicts.
- The UK competition regulator is scrutinising cloud market practices.
- Market dynamics and stakeholder perspectives reveal a complex landscape.
British banks and fintech companies partnering with large US cloud providers has become a contentious topic of discussion. Gordon McArthur, the Chief Executive Officer of the UK cloud firm Beeks, has expressed his concerns regarding this trend, which he finds ‘bizarre’. His observations are particularly relevant as his company has recently experienced substantial growth, reporting a 27% increase in sales.
McArthur’s primary concern revolves around the potential risks posed by these partnerships. He questions why banks would entrust their core data and infrastructure to major US tech companies that have publicised their intentions to expand into financial services. He warns, “Why would you give access to your core data to a company that has already said that?” This sentiment underscores the perceived threat that such collaborations may represent to domestic banking security and competitiveness.
Amid these developments, the UK Competition and Markets Authority (CMA) is delving deeper into the practices of global cloud companies due to accusations of anticompetitive behaviour. The CMA has extended its investigation timeline to allow for a more thorough analysis of the market dynamics and the potential harms involved. This investigation is poised to explore whether certain licensing practices, particularly those attributed to Microsoft by Google, are impeding competition.
Google has accused Microsoft of employing software licensing practices that restrict competition, suggesting that these limitations could decisively alter the cloud market in Microsoft’s favour. Google advocates for prompt intervention, arguing that these practices could otherwise have a lasting impact on market fairness. Microsoft, however, has countered these claims, arguing that the CMA’s views do not fully reflect the rapidly evolving nature of the market.
McArthur has expressed scepticism regarding the outcome of the CMA’s investigation, noting the significant lobbying power of these large tech firms. He remarks, “These big guys have got so much lobbying cash…so I do think it’ll be a bit toothless to be honest.” This sentiment casts doubt on the efficacy of regulatory interventions in addressing the complexities of the cloud market.
The ongoing scrutiny of cloud market practices underscores the need for cautious evaluation by stakeholders and regulators alike.
