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Ofcom has announced its probe into cloud service providers Amazon, Microsoft and Google. The investigation will look into these providers, which generate around 81% of revenues in UK public cloud, to ensure the market is working properly and not limiting innovation or growth.
This study of “hyperscalers” is part of Ofcom’s work programme to ensure digital communications markets are operating efficiently, and will continue to look into other tech providers like WhatsApp, FaceTime and Zoom in further investigations.
When the market study is launched, Ofcom will ask for initial views from interested or affected parties. The final market study is expected to be published 12 months after launch and will include any problems raised in its findings.
The move follows recent concerns over cloud concentration risk. The number of businesses investing in cloud services has increased dramatically, and according to Ofcom, less than 10% of all businesses’ global IT spending was on public cloud services in 2018, which has risen to 17% in the last year. Adding to this, Gartner predicts that by 2026, 45% of businesses IT spending will be on public cloud.
If the investigation finds the market is not working well, a number of steps will be taken Ofcom will make recommendation to the government to change regulations or policy; competition or consumer enforcement action will be taken; a market investigation reference will be made to the Competition and Markets Authority (CMA), or accept undertakings made in lieu of reference to the CMA.
Ofcom reports they will be working closely with the CMA in planning the market study and throughout the project. Earlier this year the CMA launched their own investigation into Google for suspected anti-competitive conduct.
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