The UK’s £15bn cloud computing market is being investigated by the regulator over concerns that just three US companies dominate more than 80% of the sector.
Ofcom is examining the dominance of US technology titans Amazon, Microsoft and Google as part of a wider study into digital communications markets.
The regulator, which is set to regulate the wider internet as part of plans under the Online Safety Bill, is set to launch a market study in the “coming weeks” that will look at the strength of competition in cloud services and It will examine barriers to new entry. Sector
According to Ofcom, the three biggest providers – Amazon Web Services (AWS), Microsoft and Google – collectively capture around 81% of the UK public cloud infrastructure services market.
The regulator is undertaking a “market study” under the Enterprise Act 2002 in conjunction with the Competition and Markets Authority.
Ofcom said: “We have worked closely with the CMA in planning the market study, and will continue to do so throughout the project.
“Ofcom will lead the market study, highlighting our strong expertise in communications markets and reflecting that the cloud is increasingly becoming a key element of the internet infrastructure.”
Selina Chadha, Ofcom’s director of connectivity, added: “Digital services have transformed the way we live, work, play and do business.
“That’s why we’re launching a program of work to scrutinize these digital markets, identify any competition concerns and make sure they’re working better for people and businesses. who depend on them.”
Ofcom is also set to launch a wider investigation into other digital markets over the next year, covering services such as WhatsApp, FaceTime and Zoom, as well as examining smart speakers and connected televisions.
Cambridge University professor Diane Cowell suggested in May that British regulators “need to pay more attention to how companies use the Internet and cloud computing to reduce the cost of providing products and services to each consumer.” can be drastically reduced to drive new entrants out of the market.
The former Competition Commission member said economies of scale enjoyed by the biggest digital services companies could make it difficult for new entrants to “overthrow competitors”, potentially reducing competition in the market. and therefore prices may increase.
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