Regulator to Probe Amazon, Microsoft, Google Cloud Dominance

U.K. communication regulator Ofcom is to investigate the dominance of Amazon, Microsoft and Google in the cloud services market.

The coming weeks will see Ofcom launch a study into the UK’s £15 billion ($16.9 billion) cloud sector. The watchdog will examine whether Amazon Web Services (AWS), Microsoft Azure and Google Cloud pose any barriers to competition.

Ofcom on Thursday said it will take action if it finds the companies are harming competition.

Collectively, the three firms generate around 81% of revenue in the U.K. public cloud infrastructure services market. Ofcom said to wants to “formally assess how well this market is working.”

It will examine “the strength of competition in cloud services generally and the position the three hyperscalers hold in the market.”

The regulator will also consider “any market features that [make] it difficult for other companies to enter the market and expand their share.”

Ofcom said that as cloud services are still evolving, it will look at how the market is working today and how it expects it to develop in the future. It will aim to identify any potential competition concerns early “to prevent them becoming embedded as the market matures.”

Ofcom said it will conclude its review and publish a final report including any concerns and proposed recommendations within the 12 months.

Microsoft last month outlined coming changes to the terms of its software licensing agreements. They followed complaints to antitrust regulators from some European cloud providers that the company’s practices put them at a competitive disadvantage.

Personal Messaging Apps and Virtual Assistants

Over the next year, Ofcom also plans to investigate other digital markets, including personal messaging apps and virtual assistants.

It will look into how services such as WhatsApp, FaceTime and Zoom are affecting the role of traditional calling and messaging. It says it wants to see how competition and innovation in these markets may evolve over the coming years. Moreover, it aims to understand whether any limitations on their ability to interact with each other raise potential concerns.

Ofcom will also focus on “the nature and intensity of competition” among connected televisions and smart speaker manufacturers.

“We will explore competition dynamics in this sector and identify whether there are any potential areas that require more formal examination,” it said.

Its work will include analysis of consumer behaviour, future developments and the business models of major players and their bargaining power with content providers.

Ofcom’s Selina Chadha

“The way we live, work, play and do business has been transformed by digital services,” said Selina Chadha, Ofcom’s director of connectivity. “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.”

Chadha said that is why Ofcom wants to scrutinise those markets, identify any competition concerns and ensure they’re working for people and businesses.