The “worrying” dominance of Amazon and Microsoft in the cloud services market may warrant an investigation by the UK’s competition watchdog, Ofcom said.
Competition and Markets Authority (Institute of Certified Public Accountants) has been told it may want to look into the industry as the media watchdog finds its own problems with how it favors US tech giants.
Cloud services essentially provide computing power remotely. Most of us think of the cloud as a place where we keep our files and photos without taking up space on our phone’s storage.
But cloud services are also the backbone of websites and online platforms—many businesses rely on amazon Web Services (AWS) and Microsoft sky blue.
They have 60-70% market share, Communication Bureau explain.
When such services go wrong, there can be knock-on effects for customers. For example, disney+ and Netflix Crashed by a previous AWS outage.
Ofcom director Fergal Farragher described cloud services as “the digital backbone of our economy”.
“Needs more scrutiny”
Ofcom said it was “particularly concerned” how Amazon and Microsoft were using their positions to charge customers who wanted to switch providers “substantially” more than their smaller rivals.
It also said the companies prevented certain services from working effectively with rival services.Lesser-known providers include IBM and Oracle, while Google (5-10% market share) is another player in the field.
Ofcom said Amazon and Microsoft’s approach could lead to “further concentration of the market towards them”.
Mr Farragher added: “We believe a more in-depth review is needed to ensure it is working well for the individuals and businesses that rely on these services.”
Consumer group Which? said Ofcom was “right to raise concerns” and warned that the “excessive influence” of tech giants “kept smaller competitors out” and “resulted in fewer choices and potentially higher costs for consumers”. “.
Ofcom to report by October
Ofcom said it would gather feedback on its findings by mid-May and make final recommendations in October.
Chamber of Commerce, Recently dismissed concerns over Microsoft’s £56bn takeover of gaming giant Activision BlizzardA decision may not be made on whether to investigate until then.
Microsoft said it would continue to participate in Ofcom’s research.
“We remain committed to ensuring the UK cloud industry remains highly competitive and supporting the transformative potential of cloud technology to help accelerate growth across the UK economy,” it added.
“We design our cloud services to give customers the freedom to use the technology of their choice to build the solution that works for them,” Amazon said.
“This is driving increased competition across a range of sectors in the UK economy by expanding access to innovative, highly secure and scalable IT services.”