Big tech companies to face UK probes over cloud service, messenger and smart speaker dominance

Ofcom wants to ensure there's healthy competition in various digital markets.

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Ofcom, the broadcasting and telecoms regulator in the UK, is launching a probe to look into the cloud services tech giants offer in the coming weeks to ensure that there's healthy competition in the space. Further, the regulator has revealed that it will examine messaging and video calling services, as well as smart and connected devices in the near future. For its cloud investigation, Ofcom's market study will focus on the biggest cloud providers in the region, namely Amazon Web Services (AWS), Microsoft and Google.

The three providers generate 81 percent of the revenue in the UK's £15 billion (US$16.95) cloud infrastructure services market. Ofcom's study will assess how well the market is working with these tech giants dominating the space. It will also examine the strength of the competition and whether the market, in its current state, makes it difficult for other players to enter and expand their share.

Ofcom explains that it's looking to nip any potential competition concerns in the bud to prevent them from becoming a huge issue as the cloud services market matures. The lack of healthy competition, after all, could stifle growth and innovation and could lead to low quality of service. If the regulator determines that the market isn't working well, it can recommend regulatory changes to the government, take enforcement action itself or refer the situation to the Competition and Markets Authority (CMA). To note, the CMA has a separate and ongoing investigation into Google's ad tech practices.

The regulator will also launch probes to look into other digital markets over the next year. It will assess the impact of messaging and video calling services, such as WhatsApp, FaceTime and Zoom, on traditional methods of calling and messaging. Ofcom aims to determine how competition in this area could evolve in the coming years and whether the lack of cross-messaging and cross-calling capabilities between the services is a cause of concern.

The agency also intends to investigate the competition in the smart speaker and TV space. It plans to analyze consumer behavior, as well as the bargaining power of major players with companies that provide content for the devices.

Selina Chadha, Ofcom's Director of Connectivity, said:

"The way we live, work, play and do business has been transformed by digital services. But as the number of platforms, devices and networks that serve up content continues to grow, so do the technological and economic issues confronting regulators.

That’s why we’re kick-starting a programme of work to scrutinise these digital markets, identify any competition concerns and make sure they’re working well for people and businesses who rely on them."