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Ofcom to examine cloud dominance of Google, Microsoft and Amazon

Ofcom cloud

Ofcom, the UK’s broadcasting and telecoms regulator, has announced it will launch a study examining the market dominance of US tech giants Amazon, Microsoft, and Google in the UK cloud services industry.

The regulator will determine if there are competition concerns that may require further action following the study.

The cloud computing market has exploded into a highly valued industry, worth £15bn in the UK alone according to Ofcom. Cloud computing allows on-demand access to computing resources and services, such as data storage and computing power, without the need to directly manage them.

While cloud computing has become essential for many businesses, the market is largely dominated by the big three of cloud computing: Amazon, Microsoft, and Google.

Data from Synergy Research Group published this year found that the big three make up 65% of the global cloud market share. And in the UK, the three tech giants account for 81% of revenue in the UK public cloud infrastructure services market.

Ofcom’s new remit

Ofcom’s examination of the market, under the Enterprise Act 2002, is part of the regulator’s new programme of work to ensure fair practices in the digital communications sector.

Should the examination find the market is not working well, Ofcom has said it may recommend policy and regulatory changes to the government and possibly launch a full investigation through the Competition and Markets Authority (CMA).

Ofcom will also be starting a “broader programme” over the next year examining a number of digital markets. Subjects of these upcoming examinations will include WhatsApp, FaceTime, and Zoom, to determine how communication technology is affecting traditional calls and messages.

Another area of interest for the regulator is the digital assistant market, including smart speakers like the Amazon Echo and Google Home.

“The way we live, work, play and do business has been transformed by digital services. But as the number of platforms, devices and networks that serve up content continues to grow, so do the technological and economic issues confronting regulators,” said Selina Chadha, director of connectivity at Ofcom.

“That’s why we’re kick-starting a programme of work to scrutinise these digital markets, identify any competition concerns and make sure they’re working well for people and businesses who rely on them.”

UK authorities have been taking steps to regulate Big Tech outside of the country to demonstrate Britain’s position in global regulation.

This year alone, UK regulators have launched a series of investigations into Amazon, Microsoft, Google, and Meta among others.