The UK has launched a probe into the cloud market to evaluate whether or not Amazon, Microsoft and Google are limiting competitors and innovation, because it steps up its scrutiny of Big Tech.
AWS, Microsoft Azure and Google, known as “hyperscalers” due to the dimensions of the info facilities used to course of and retailer knowledge, generate about 81 per cent of revenues within the £15bn UK cloud market, having elevated their share from 70 per cent in 2018, in keeping with Ofcom, the communications regulator.
“We will examine the strength of competition in cloud services generally and the position the three hyperscalers hold in the market,” it said on Thursday.
“Because the cloud sector is still evolving, we will look at how the market is working today and how we expect it to develop in the future — aiming to identify any potential competition concerns early to prevent them becoming embedded as the market matures.”
Microsoft mentioned: “We are aware of Ofcom’s cloud services market study and look forward to contributing.”
European authorities have stepped up their scrutiny of the affect of Big Tech and video streaming firms on home markets. Earlier this 12 months, the UK’s Competition and Markets Authority launched an investigation into whether or not Google “abused” its dominant place within the advert tech market.
Cloud computing permits people and corporations to course of and retailer knowledge remotely, with out counting on any of their very own server and computing tools. These services have been more and more outsourced to hyperscaler cloud suppliers lately, which have developed complicated networks of information facilities world wide and have a tendency to supply extra aggressive pricing for services than in-house knowledge facilities.
If the investigation, which is able to take as much as 12 months, finds any proof of market in poor health well being, the regulator may advocate that the federal government change its guidelines, take competitors enforcement motion or name on the CMA to analyze additional.
Ofcom may also search to begin a broader probe into apps and gadgets for accessing audiovisual content material, together with WhatsApp, FaceTime and Zoom, to know how these services are affecting conventional telecoms services equivalent to voice calls and messaging.
Paul Stone, senior counsel at Charles Russell Speechlys, a global legislation agency, mentioned the probe “may act as a catalyst for a full-blown market investigation, which could have a significant impact on big tech firms”.
“Given that Ofcom look like involved about market entry, measures they might implement embrace limiting any exclusivity preparations used by the ‘hyperscalers’ or requiring interoperability with new gamers,” he added.
Amazon and Google didn’t reply to a request for remark.