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Ofcom will scrutinize the world’s biggest technology companies to ensure their dominance in areas such as cloud computing, messaging and smart devices, the communications regulator has announced.
Of the three cases, the priority cloud service investigation concerns Amazon, Microsoft and Google.
Between them, these “hyperscalers” control more than four-fifths of the UK cloud computing market, half of which is owned by Amazon.
In the coming year, the regulator will begin examining a wider range of digital services. WhatsApp, FaceTime and Zoom come into the lens, with Ofcom looking at how their market power is affecting traditional calling and messaging and whether the lack of interoperability is “raising concerns”.
Smart speakers such as Amazon’s Echo, Google’s Nest and Apple’s HomePods, along with smart TVs and digital personal assistants, will be tested to ensure their impact on consumer behavior does not distort the market for TV, radio and online content.
Selina Chadha, Ofcom’s director of communications, said: “The way we live, work, play and work has been transformed by digital services.
But as the number of platforms, devices, and networks that deliver content grows, technological and economic issues collide with regulators.
“That’s why we’re launching a program of work to examine these digital markets, identify competitive risks and ensure they’re working well for the people and businesses that rely on them.”
The cloud study, which will begin in the coming weeks, “will examine the strength of competition in cloud services in general and the position of the three hyperscalers in the market,” the regulator said in a statement.
“We will also look at any market characteristics that may limit innovation and growth in this sector by making it difficult for other companies to enter the market and expand their share.
“How well digital markets work will be critical to outcomes for clients in the sectors we control. We need to look at companies using digital infrastructure and services as much as we have previously focused on cables, masts and satellites.”
The investigations are carried out under the Enterprise Act 2002, which gives Ofcom the power to commission market studies in digital communications markets and investigate potentially unfair business practices and contractual terms.
Ofcom is expected to receive more powers to regulate internet content providers in the online safety bill. Originally slated to be passed before the summer break, the bill was shelved due to timing, but the new culture secretary, Michelle Donnellan, has promised to go ahead with the legislation with some changes.
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