What happened

Shares of e-commerce and cloud computing kingpin Amazon (AMZN 1.62%) slumped Wednesday, shedding as much as 3.1%. As of 1:36 p.m. ET today, the stock was still down 2.6%.

The downtrend in the broader market certainly didn't help, but the catalyst that pushed the stock lower was a report that U.K. regulators could launch an investigation into both Amazon's and Microsoft's (MSFT 1.58%) cloud practices.

So what

The U.K.'s media and communications regulator, Ofcom, released a statement saying it has "significant concerns" about practices used by Amazon and Microsoft in the cloud infrastructure market. The regulatory body said it had conducted a market study and "has provisionally identified features and practices that make it more difficult for customers to switch and use multiple cloud suppliers." 

The report stated that "cloud computing has become critical for many businesses across the economy ... and has transformed the way they deliver services on which we all rely every day." It said that Amazon Web Services (AWS) and Microsoft Azure have a combined market share of between 60% and 70%, and it identified several practices that represented cause for concern. These included high fees to transfer data to another cloud provider, technical restrictions that prevent cloud services from working seamlessly with each other, and discounts that encourage customers to use a single cloud provider.

As a result of its findings, Ofcom is referring the matter to the Competition and Markets Authority -- Britain's antitrust regulator -- for further action.

Now what

The recommendation is being reviewed by the Competition and Markets Authority. The news comes just days after Alphabet's (GOOGL 0.54%) (GOOG 0.51%) Google accused Microsoft of engaging in anticompetitive behavior regarding several imminent deals across Europe. Google cloud chief Amit Zavery said in an interview that the company broached the issue with antitrust regulators in the European Union.

It's too early to say whether regulators will launch an official investigation, what its findings might be, or if there will be any repercussions. Still, this is a matter that bears watching.