Ofcom is examining the cloud business practices of Amazon, Microsoft and Google in the UK, for possible competition concerns
The government-approved watchdog for the UK broadcasting, telecommunications and postal industries is launching a study regarding digital markets in the communications sector, increasing its scrutiny of Big Tech competition practices.
With cloud infrastructure playing an increasingly vital role in delivery of telecoms services, Ofcom looks to ensure that operations across the £15bn UK cloud market are properly serving customers, and healthily competitive.
The planned 12 month investigation will look for evidence of anti-competition on the part of the hyperscalers, which if found will lead to Ofcom taking further action, such as:
- recommending governmental change to regulations or policy;
- competition or consumer enforcement action;
- making a market investigation reference to the Competition and Markets Authority (CMA);
- accepting undertakings in lieu of making a market investigation reference.
As well as Amazon, Microsoft and Google — which collectively generate around 81 per cent of revenues in the UK public cloud infrastructure services market — Ofcom also plans to examine the practices of WhatsApp and Zoom as online and traditional networks converge.
Ofcom’s study will come under the UK Enterprise Act 2002, which overall gives authorities like Ofcom and the CMA more enforcement power when overseeing market practices.
“We will examine the strength of competition in cloud services generally and the position the three hyperscalers hold in the market,” the regulator told the Financial Times.
“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.”
Selina Chadha, Ofcom’s director of connectivity, commented: “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.
“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.”
Big Tech has been scrutinised and penalised by regulators across Europe, with Google recently being fined a record €4bn by the European Commission, on the grounds of unfairly promoting its search engine on Android devices.
The corporation’s adtech practices have also been subject to lawsuits in the past month.
Related:
How the regulation of big tech can affect your business — The UK’s pending Online Safety Bill and the EU’s Digital Services Act are designed for the regulation of big tech, but there is the issue of legal but harmful and unintended consequences that can affect your business.
Hyperscaler carbon emissions to drive cloud purchase decisions by 2025, says Gartner — Gartner has predicted that carbon emissions from hyperscalers will be a top three criterion in cloud purchase decisions by 2025.
