Ofcom to probe UK cloud services market

Ofcom is the regulator and competition authority for the UK communications industries. It regulates the TV and radio sectors, fixed line telecoms, mobiles, postal services, plus the airwaves over which wireless devices operate. According to Ofcom, cloud computing is a huge and fast-growing market, which uses remote servers to offer services such as software, storage and computing power. The hyperscalers, AWS, Microsoft and Google combined generate about 81% of revenues in the U.K. public cloud infrastructure services market.

UK comms regulator will examine the position of Amazon, Microsoft and Google in the cloud services market with the aim of ensuring that digital communications markets are working for UK businesses and consumers.

Ofcom will investigate the world’s biggest tech companies to ensure their dominance in areas such as cloud computing, messaging and smart devices works for the people and businesses of Britain, the communications regulator has said. The regulator is set to launch a market study in the “coming weeks” that will assess how well the market is working, as well as any barriers to new entrants into the sector.

As per the sources, 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 audio-visual “gateways” market, which includes products like Amazon’s Alexa.

“The way we live, work, play and do business has been transformed by digital services,” Ofcom director of Connectivity, Selina Chadha said in a statement. “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.”

Ofcom’s cloud services investigation will look into any features that might limit innovation and growth in the sector by making it difficult for other companies to enter the market and expand their share. It is working closely with the Competition and Markets Authority on the study and said it aims to consult on its interim findings and publish a final report within a year.

Going forward, Another future area of focus for Ofcom is the nature and intensity of competition among digital personal assistants and audio-visual ‘gateways’ – such as connected televisions and smart speakers – through which people access traditional TV and radio, as well as online content.

S Mohini Ratna, Editor, VARINDIA