The UK Regulator Targets Cloud Giants

Ofcom, the UK telecoms regulator, announced a probe into Amazon, Microsoft, and Google in their positions in cloud services. The investigation will be held alongside a separate one concerning the role of communications apps and connected devices in the country.

Starting with the cloud, Ofcom stated its probe will explore if digital communications markets are working well for people and businesses in the UK, as the sector continues to gain more prominence. Ofcom explained cloud computing uses remote servers to offer a range of services and it has become an essential part of how products are delivered to telecom users as well as those consuming TV, radio, and audio content.

The probe will see Ofcom launch a market study in the coming weeks looking at the three largest providers of cloud services, described by the regulator as hyperscalers, to formally assess how the market is operating. It said the trio held 81% of cloud market share in the UK, in a segment worth £15 billion in the country. “We will examine the strength of competition in cloud services generally and the position the three hyperscalers hold in the market,“ Ofcom stated.

It will further consider any market features which might limit innovation and growth in this sector by making it difficult for other companies to enter. Once it concludes the study, it will decide whether further action is required, which could include recommendations to the government to change policy, take competition enforcement action, or refer the case to the Competition and Markets Authority.

In addition, the regulator aims to commence a broad probe into how services including WhatsApp, FaceTime, and Zoom are affecting traditional calling and messaging. It said it wants to understand whether any limitations on their ability to interact with each other raise potential concerns. Devices including smart speakers and connected TVs will also fall under Ofcom’s gaze as it seeks to judge whether the way the sector operates would require a more formal examination.