According to Ofcom, its market study has provisionally found features and practices that make switching and using multiple cloud suppliers more difficult for customers
Ofcom plans to refer the UK cloud services market to the UK CMA for further investigation. (Credit: Jim Linwood/Wikipedia.org)
The Office of Communications (Ofcom) said that it is proposing to refer the UK cloud services market to the UK Competition and Markets Authority (CMA) for further investigation.
Specifically, the British communications regulator is concerned regarding Amazon and Microsoft cloud service practices due to their market position.
According to Ofcom, its market study has provisionally found features and practices that make switching and using multiple cloud suppliers more difficult for customers.
The regulator started a study into cloud infrastructure services in the UK under the Enterprise Act 2002 in October 2022.
Ofcom found that Amazon Web Services (AWS) and Microsoft are the two leading providers of cloud infrastructure services in the UK with a combined market share of 60-70%.
Google is the closest competitor of the duo with 7%-10% market share.
The regulator stated that the charges paid by customers to transfer their data out of a cloud are set higher by these companies when compared to other providers. Technical restrictions are also imposed by the leading firms on interoperability, said Ofcom.
The British communications regulator stated that the limitations on customers’ ability to use more than one provider will make it difficult for smaller cloud providers to compete with the market leaders.
Ofcom responsible for the market study Fergal Farragher said: “We’ve done a deep dive into the digital backbone of our economy, and uncovered some concerning practices, including by some of the biggest tech firms in the world.
“High barriers to switching are already harming competition in what is a fast-growing market. We think more in-depth scrutiny is needed, to make sure it’s working well for people and businesses who rely on these services.”
Ofcom has called for feedback on interim findings and proposal by 17 May 2023 to refer for market investigation in the UK.