Ofcom from the UK probes Amazon, Microsoft and Google on cloud dominance

The investigation will focus on so-called “hyperscalers” such as Amazon Web Services and Microsoft Azure, which allow companies to access computing power and data storage from remote servers.

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British media regulator Ofcom is investigating Amazon, Microsoft and Google’s tight grip on the cloud computing industry.

In the coming weeks, the watchdog will launch a study to examine the position of companies offering public cloud infrastructures and whether they represent obstacles to competition.

Its investigation, announced Thursday, will focus on so-called “hyperscalers” such as Amazon Web Services, Microsoft Azure and Google Cloud, which allow companies to access computing power and data storage from remote servers, rather than hosting it on their own. private infrastructure.

Further action could be taken by the regulator if it finds that companies are hurting competition. Selina Chadha, Ofcom’s director of connectivity, said the regulator has not yet reached an opinion that the cloud giants are involved in anti-competitive behavior. Ofcom said it will conclude its review and publish a final report that will include any proposed concerns and recommendations within 12 months.

Amazon, Microsoft, and Google were not immediately available for comment when contacted by CNBC.

The review will be part of a broader digital strategy promoted by Ofcom, which regulates the broadcasting and telecommunications industries in the UK

It also plans to investigate other digital markets, including personal messaging and virtual assistants like Amazon’s Alexa, over the next year. Ofcom said it was interested in how services including Meta’s WhatsApp, Facetime and Apple’s Zoom have impacted traditional calling and messaging, as well as the competitive landscape between digital assistants, connected TVs and smart speakers.

“The way we live, work, play and do business has been transformed by digital services,” Ofcom’s Chadha said in a statement Thursday. “But as the number of platforms, devices and networks that deliver content continues to grow, so do the technological and economic issues facing regulators.”

“That is why we are embarking on a program of work to look into these digital markets, identify any competition concerns and make sure they are working well for the people and companies that rely on them,” he added.

Ofcom has been selected as the guarantor of new strict rules that control harmful content on the Internet. But the legislation, known as the Online Safety Bill, is unlikely to go into effect soon after Liz Truss replaced Boris Johnson as prime minister. With the Truss government grappling with a plethora of problems in the UK, not least the cost of living crisis, regulation of online safety is expected to move to the bottom of the political priority row for the government.

The move adds to efforts by other regulators to curb big tech companies over the alleged stranglehold they have on various parts of the digital economy.

The Competition and Markets Authority has several active investigations into Big Tech companies and wants additional powers to ensure a level playing field in digital markets. The European Commission, meanwhile, has fined Google billions of dollars for alleged antitrust offenses, is investigating Apple and Amazon in separate cases and has passed fundamental digital laws that could reshape the business models of the internet giants.

Cloud competition

Amazon has an edge in the cloud infrastructure services market, with its Amazon Web Services division making billions of dollars in profits every year. By 2021, AWS grossed $ 62.2 billion in revenue and over $ 18.5 billion in operating revenue.

Microsoft’s Azure is the first place, while Google is the third largest player. Other companies, including IBM and China’s Alibaba, also manage their own cloud arms.

Together, Amazon, Microsoft and Google generate around 81% of revenue in the UK cloud infrastructure services market according to Ofcom, which estimates the market is worth £ 15 billion ($ 16.8 billion).

Microsoft recently announced a number of changes to the cloud contract terms, making it easier for customers to use competing cloud platforms in addition to Microsoft. The Redmond, Washington-based company had faced complaints from rivals in Europe that it limited choice in the market.

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