The probe will focus on so-called “super”s such as Amazon Web Services and Microsoft Azure, which allow companies to access computing power and store data from remote servers.
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In the coming weeks, the watchdog will launch a study to examine the position of companies providing public cloud infrastructure and whether they pose any barriers to competition.
The investigation announced Thursday will focus on so-called “supercapacitors” such as Amazon Web Services, Microsoft Azure and Google Cloud, which allow companies to access computing power and store data from remote servers, rather than hosting it on their own infrastructure.
The regulator can take further action if it finds that companies are harming competition. Selena Shada, director of communications at Ofcom, said the regulator had not yet reached an opinion on whether the cloud giants were engaging in anti-competitive behavior. Ofcom said it will conclude its review and publish a final report with 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 form part of a broader digital strategy being pushed by Ofcom, which regulates the UK’s broadcasting and telecommunications industries.
It also plans to explore other digital markets, including personal messaging and virtual assistants like Amazon’s Alexa, over the next year. Ofcom said it is interested in how the services are included dead The WhatsApp, An apple Facetime and Zoom It has affected 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 serving content continues to grow, so do the technological and economic problems facing regulators.”
“This is why we are launching a program of work to examine these digital markets, identify any competition concerns and ensure that they work well for the people and businesses that depend on them,” she added.
Ofcom has been chosen as the enforcer of strict new rules to monitor harmful content on the Internet. But the legislation, known as the Internet Safety Act, is unlikely to take effect any time soon after Liz Truss replaced Boris Johnson as prime minister. With the Truss government grappling with a slew of problems in the UK – not least the cost of living crisis – regulation of online safety is expected to move to the back of the government’s list of policy priorities.
The move adds to efforts by other regulators to rein in big tech companies over the perceived stifling grip they have over 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 across digital markets. Meanwhile, the European Commission has fined Google billions of dollars for alleged antitrust crimes, is investigating Apple and Amazon in separate cases, and passed landmark digital laws that could reshape the internet giants’ business models.
Amazon comfortably leads the cloud infrastructure services market, with its Amazon Web Services division generating billions of dollars in profits each year. In 2021, AWS entered into $62.2 billion in revenue and over $18.5 billion in operating income.
Microsoft Azure is the number one runner-up, while Google is the third biggest player. Other companies, including IBM and China’s Alibaba, also operate their own cloud arms.
Combined, Amazon, Microsoft and Google generate approximately 81% of revenue in the UK cloud infrastructure services market according to Ofcom, which estimates the market value at 15 billion pounds ($16.8 billion).
Microsoft recently announced a number of changes to cloud contract terms, making it easier for customers to use competing clouds in addition to Microsoft. The Redmond, Washington company faced complaints from competitors in Europe that it was limiting choice in the market.