Press Story

More than a third of tech-intensive firms have shelved a product because of a major technology company dominating the market
72 per cent say proposed stronger competition measures could help them lower prices or produce better products
IPPR calls on government to back faster, bolder competition enforcement to strengthen UK growth and homegrown industry

The market power of a handful of global technology giants is holding back British businesses and limiting the UK’s ability to capture the gains from AI, a new IPPR report warns today.

New polling for the think tank by Opinium finds that 79 per cent of UK businesses that rely on digital platforms and infrastructure are concerned about large technology companies using their dominance to limit competition. These firms rank tech giants’ market power as the second-biggest constraint on their growth, ahead of access to finance and talent.

The consequences are already being felt in businesses’ ability to innovate. More than a third say they have decided not to offer a product in the past two years because of a major technology company dominating the market. Across the three competition measures tested, 72 per cent of firms on average said if implemented they would be able to lower prices or produce better products.

IPPR warns that previous governments have allowed a small number of firms to build extraordinary control over infrastructure on which the wider economy depends. Google handles more than 90 per cent of UK searches, Microsoft and Amazon Web Services each account for 30 to 40 per cent of UK customer spending on cloud services, and Microsoft business software is now under investigation for its market power.

This market concentration also leaves businesses that depend on big tech with limited alternatives. Almost seven in ten firms surveyed (68 per cent) say switching away from their main technology provider would be costly, disruptive or impossible. Half say they could continue operating normally for only a matter of days if they lost access to that provider.

IPPR argues that stronger competition would address two problems: giving innovative British firms a fairer chance to enter, compete and scale, while giving businesses that rely on major technology providers greater choice and lower costs.

The stakes are becoming even higher with the rapid growth of AI. Without stronger competition, IPPR warns that UK investment in home-grown AI companies risks being undermined as long as they depend excessively on infrastructure controlled by overseas technology giants, making it harder for those firms to compete and grow.

The UK has already created new digital competition rules through the Digital Markets, Competition and Consumers Act, giving the Competition and Markets Authority (CMA) new tools to tackle entrenched market power in the technology sector.

IPPR argues the CMA remains one of the UK’s most expert regulators, but needs stronger political backing from government to move faster and more boldly.

The think tank is calling on the government to:

Issue a new strategic steer to the CMA making clear that opening digital markets to competition is central to the government's growth agenda
Protect the CMA's independence and combine competition enforcement with support for UK firms to grow and scale.

And for the CMA, IPPR recommends:

Faster action to increase competition in cloud services and prevent dominance becoming entrenched in emerging AI markets
Keeping Google's position in search under review as AI transforms the market

Roa Powell, senior research fellow at IPPR and author of the report, said:

“Big Tech dominance is holding back British businesses, limiting competition and making it harder for new firms to innovate and grow.

"Our research shows that businesses themselves see stronger competition as part of the solution – it can mean more choice, lower prices and better products, while giving UK challengers more room to scale.

"The CMA has the expertise and the tools to improve competition, what it needs now is clear political backing from government to act boldly.”

Rocio Concha, Which? director of policy and advocacy, said:

“The IPPR is right to highlight the CMA’s critical role in curbing the market dominance of big tech and levelling the playing field for competitors. More competitive digital markets could boost investment and innovation, giving consumers more choice and potentially lower prices.

“The government should publicly support the CMA to use the powers granted to it by parliament to hold the dominant businesses in digital markets to account.”

ENDS

Roa Powell is available for interview

CONTACT

Rosie Okumbe, senior digital and media officer: 07825 185421 r.okumbe@ippr.org

NOTES TO EDITORS

The IPPR paper, Bottleneck Britain: How digital competition could power UK growth and sovereignty, by Roa Powell, will be published at 0001 on Thursday 27 August. It will be available for download at https://www.ippr.org/articles/bottleneck-britain
Advance copies of the report are available under embargo on request
Opinium conducted an online survey, designed by IPPR, of 417 UK businesses between 26 June and 3 July 2026. Businesses were screened to include those significantly reliant on large technology platforms and/or digital infrastructure for generating sales or revenue, marketing and acquiring customers, core business operations, software, cloud computing or data storage, or selling and distributing products and services online. Sole traders were excluded.
The 72 per cent figure is the average share of firms across the three proposed competition measures tested who said introducing them would enable their business to lower prices or produce better products.
IPPR (the Institute for Public Policy Research) is the UK’s most influential think tank, with alumni in Downing Street, the cabinet and parliament. We are the practical ideas factory behind many of the current government’s flagship policies, including changes to fiscal rules, the creation of a National Wealth Fund, GB Energy, devolution, and reforms to the NHS. As an independent charity working towards a fairer, greener, and more prosperous society, we have spent almost 40 years creating tangible progressive change - turning bold ideas into common sense realities. www.ippr.org