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The UK will probe Amazon, Microsoft, and Google regarding their cloud market share

by Önder Erdine
September 23, 2022
in News, Technology & IT
Home News
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  • A new Ofcom investigation will see the UK communications regulator probe the operations and market practices of cloud hyperscalers Amazon Web Services, Microsoft, and Google.
  • Ofcom will look at the firms with the largest market share.
  • The UK cloud services business is valued at £15 billion, yet at the moment, only three corporations (AWS, Microsoft, and Google) generate 81% of the infrastructure services income.
  • The regulator has said it will explore other options and take action if the market fails to function correctly.
  • In the future, Ofcom will conduct a broader examination into other digital markets in addition to cloud infrastructure.

The UK communications watchdog, Ofcom, has launched a fresh probe into cloud hyperscalers Amazon Web Services, Microsoft, and Google. Under the authority granted by the Enterprise Act 2022, the regulator will conduct a market analysis of the three enterprises in the coming weeks to ensure that the digital communications markets are functioning properly.

Ofcom investigation will include companies with the biggest market share

According to Ofcom, the UK cloud services industry is worth £15 billion; however, at the moment, only three companies (AWS, Microsoft, and Google) produce 81% of the infrastructure services market revenues. According to Google, the market is now divided as follows: AWS (40%), Microsoft (25%), Google (16%), and others (19%).

The new Ofcom investigation is part of the regulator’s new work program, which will see it spend its efforts on ensuring “digital communications work for everyone.” The work program is an acknowledgment by Ofcom that the internet has changed how consumers and companies in the UK buy items, acquire information, and utilize public services.

Ofcom investigation will probe Amazon, Microsoft, and Google regarding their market share
Ofcom investigation will probe the companies with the biggest market share: AWS (40%), Microsoft (25%), Google (16%), and others (19%)

It stresses that it must consider how businesses use digital infrastructure and services in addition to the cables, masts, and satellites it has previously concentrated on.

The new Ofcom investigation, which will focus on hyperscale cloud providers, will analyze how effectively the market works for infrastructure cloud services and will look at the general competition level in cloud services. Ofcom will also assess any market characteristics that may impede innovation and growth in the industry by making it harder for new enterprises to enter and extend their market share.


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Ofcom stated, “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 from becoming embedded as the market matures.”


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“When we launch the market study, we will invite initial views on the UK cloud market from interested or affected parties. We plan to consult on our interim findings and publish a final report within twelve months, including any concerns or proposed recommendations. If we find a market is not working well, there can be negative impacts on businesses and ultimately consumers, through higher prices, lower service quality and reduced innovation.”

Ofcom investigation will probe Amazon, Microsoft, and Google regarding their market share
If the market fails to function correctly according to the Ofcom investigation, the regulator will explore options and take action

If the market is not functioning properly according to the Ofcom investigation, the regulator stated that it would consider one of the following options:

  • Make suggestions to the government for changes to regulations or policies.
  • Take competitive-enforcement or consumer-protection action
  • Involve the Competition and Markets Authority in a market probe (CMA)
  • Accept tasks instead of generating a market research reference.

Ofcom has worked with the CMA to design the market analysis and will continue to do so throughout the project.

Other digital marketplaces will be next

In addition to cloud infrastructure, another Ofcom investigation will be launched; a larger investigation into other digital marketplaces, such as digital communication applications and gadgets for accessing audiovisual material.

The regulator expressed interest in how services like WhatsApp, FaceTime, and Zoom are changing the role of traditional phones and messaging and how competition and innovation in these sectors may change in the future. It is particularly interested to learn whether any constraints on their capacity to engage with one another present possible problems (for example, you cannot WhatsApp to video call someone using FaceTime; you must use the same program).

Ofcom investigation will probe Amazon, Microsoft, and Google regarding their market share
Another Ofcom investigation how technologies like WhatsApp, FaceTime, and Zoom are altering the role of phones and messaging is on its way

In addition, the Ofcom investigation will look into the “nature and intensity of competition” among digital personal assistants and audiovisual always-on devices such as linked televisions and smart speakers. It wishes to understand the competitive dynamics in this sector better and identify any prospective areas that may necessitate further formal investigation.

Its work will involve an examination of “consumer behavior, future developments, as well as the role and business models of major players and their bargaining power with content providers,” according to the organization.


Cloud costs have started to become a heavy burden for the IT sector


Ofcom’s Director of Connectivity, Selina Chadha, stated, “Digital services have transformed the way we live, work, play and do business. 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.”

“That’s why we’re kick-starting a program of work to scrutinize these digital markets, identify any competition concerns, and make sure they’re working well for people and businesses who rely on them,” she added.

Tags: cloud hyperscalerOfcom

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