Ofcom concern over Amazon, Microsoft and UK cloud market 

Regulator finds businesses have difficulty switching between or using multiple cloud suppliers, and refers matter to Competition and Markets Authority (CMA).  

These days, we don’t really think twice about using the ‘cloud’ – that nebulous space somewhere out in the internet where we increasingly store our data. One reason we take the cloud for granted is that hosting companies do such a good job managing the multiple servers, keeping our data both accessible and secure at the same time. It works and is reliable so why spare it another thought?

white clouds and blue sky during daytime

Photo by engin akyurt

Well, with more of us using the cloud to store ever more data, hosting cloud services is a fast-expanding business and telecoms regulator Ofcom has had some concerning thoughts about the way the cloud is organised. Ofcom recently conducted a market study of cloud hosting companies, examining the strength of competition and the features that might limit innovation and growth in the sector. The regulator was particularly focused on factors that can make it difficult for new cloud providers to enter the market or for smaller companies to expand. 

Acknowledging that the cloud sector is still evolving, the regulator was keen to explore both how the market works today and the way it is expected to develop in future. In doing so, it aimed to identify potential concerns related to competition early and prevent them from becoming embedded as the market matures. After all, prevention is better than cure. 

In undertaking this market study, Ofcom identified a number of issues in the sector that make it difficult for UK businesses to switch between or use multiple cloud suppliers. Indeed, it highlighted concerns in particular with the position of market leaders Amazon and Microsoft. 

These concerns have been serious enough for Ofcom to refer the whole UK public cloud infrastructure services market to the Competition and Markets Authority. The CMA will now conduct an independent investigation of the market to decide whether there is an adverse effect on competition. If so, the CMA will also decide on whether it takes action itself or recommends others to do so. 

Whatever the CMA finds, this could have quite an impact on the way we access and share data. Infotec will report on developments.

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