AWS, Microsoft and Google combined generate about 81% of revenues in the U.K. public cloud infrastructure services market
British media regulator Ofcom has initiated an investigation into whether Amazon, Microsoft and Google’s cloud computing dominance is a threat to market competition.
In a statement that acknowledged the massive impact of cloud services on how telecoms users receive and interact with services and content, the regulatory body said it will “examine the strength of competition in cloud services generally and the position the three hyperscalers hold in the market [and] consider any market features that might limit innovation and growth in this sector by making it difficult for other companies to enter the market and expand their share.”
Known as ‘hyperscalers,’ Amazon Web Services (AWS), Microsoft and Google are the largest cloud services providers, and according to Ofcom’s data, generate approximately 81% of revenues in the U.K. public cloud infrastructure services market combined.
“Because the cloud sector is still evolving, we will look at how the market is working today and how we expect it to develop in the future — aiming to identify any potential competition concerns early to prevent them becoming embedded as the market matures,” Ofcom said.
Ofcom also laid out several courses of action it will take if it finds the marketing is “not working well.” These actions include making recommendations to government to change regulations or policy; taking competition or consumer enforcement action; making a market investigation reference to the Competition and Markets Authority (CMA); and accepting undertakings in lieu of making a market investigation reference.
The regulator will also investigate additional markets, including personal messaging, because it is interested in how digital services like Meta’s WhatsApp, Apple’s Facetime and Zoom have impacted traditional calling and messaging, as well as the effects of the digital personal assistants and audiovisual “gateways” market, which includes products like Amazon’s Alexa.
“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, Ofcom’s director of connectivity. “That’s why we’re kick-starting a program of work to scrutinize these digital markets, identify any competition concerns and make sure they’re working well for people and businesses who rely on them.”
