The UK’s media regulator Ofcom is launching a market study into Amazon, Google and Microsoft’s cloud services amid competition concerns.
The three companies currently generate around 81 per cent of revenues in the UK public cloud infrastructure services market.
Under the Enterprise Act 2022, Ofcom wants to formally assess how well the market is working. It intends to examine the strength of competition in cloud services generally and the position the three companies hold in the market. It added that it intends to consider any market 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.
Ofcom added that it intends to examine how the market is working currently and how it is expected to develop in the future – aiming to identify any potential competition concerns early to prevent them from becoming embedded as the market matures.
The regulator said that if it finds the market is not working well, there can be negative impacts on businesses and ultimately consumers, through higher prices, lower service quality and reduced innovation. In these circumstances, Ofcom can take one or more of the following steps:
- make recommendations to government to change regulations or policy;
- take competition or consumer enforcement action;
- make a market investigation reference to the Competition and Markets Authority (CMA);
- accept undertakings in lieu of making a market investigation reference.
Ofcom said it had worked closely with the CMA in planning the study and will continue to do so during the course of the project.
It plans to consult on its interim findings and publish a final report – including any concerns or proposed recommendations – within 12 months.