Ofcom investigates Amazon, Microsoft and Google over ‘competition concerns’

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Amazon, Microsoft and Google watchdog Ofcom is investigating their cloud services to see if there is enough competition in the market.

The regulator is expected to launch a study in the “coming weeks” to assess any barriers to new entrants to the sector.

According to Ofcom, the services provided by the three companies together account for around 81 per cent of revenue in the UK public cloud infrastructure services market.

He is also expected to launch a wider investigation into digital communications next year, which will cover messaging services such as WhatsApp, FaceTime and Zoomas well as smart speakers and connected TVs.

Selina Chadha, Ofcom’s director of connectivity, said: “Digital services have changed the way we live, work, play and do business. But as the number of platforms, devices and networks offering content grows, so do the technological and economic issues facing regulators.

“That’s why we’re launching a program of work to scrutinize these digital marketplaces, identify potential competition concerns and ensure they work well for the people and businesses who rely on them.”

Ofcom’s investigation into cloud services will look at any features that could limit innovation and growth in the sector by making it harder for other companies to enter the market and increase their share.

It is working closely with the Competition and Markets Authority (CMA) on the study and says it plans to consult on its interim findings and publish a final report within a year.

If it finds that competition is not working as it should and that businesses and consumers are being affected, it can take enforcement action, recommend changes to regulations or policy to the government, or refer the matter to the CMA for further investigation.

The use of cloud services has exploded in recent years.

In 2018, less than 10 percent of global corporate IT spending was on public cloud services, but that rose to 17 percent last year due to increased remote work during the pandemic.

Some experts predict it will reach 45 percent of corporate IT spending by 2026, according to Ofcom.

The Observer’s broader research into messaging services and smart speakers will examine how these impact the role of traditional calling and messaging, as well as how the competition works now and may evolve in the coming years.

Ofcom said: “Another future area that Ofcom is focusing on is the nature and intensity of competition between digital personal assistants and audiovisual ‘gateways’ – such as connected TVs and smart speakers – through which people access traditional TV and radio and online contents. .

“We will explore the dynamics of competition in this sector and determine whether there are potential areas that require more formal examination.”

The power that cloud service providers have over the Internet is most noticeable when services fail. In December 2021, a a five-hour Amazon Web Services outage took down many popular websites governments, universities and companies.

People trying to use Instacart, Venmo, Kindle, Roku, and Disney+ have reported issues, as have many airlines, car dealerships, and more.

Additional reporting by Associated Press

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