Amazon, Microsoft and Google face UK probe over dominance in cloud computing

British media regulator Ofcom is investigating Amazon, Microsoft and Google's choky grip connected the unreality computing industry.

In the coming weeks, the watchdog volition motorboat a survey to analyse the presumption of firms offering nationalist unreality infrastructure and whether they airs immoderate barriers to competition.

Its probe, announced Thursday, volition absorption connected alleged "hyperscalers" similar Amazon Web Services, Microsoft Azure and Google Cloud, which fto businesses entree computing powerfulness and information retention from distant servers, alternatively than big it connected their ain backstage infrastructure.

Further enactment could beryllium taken by the regulator if it finds the companies are harming competition. Selina Chadha, Ofcom's manager of connectivity, said the regulator hadn't yet reached a presumption connected whether the unreality giants are engaged successful anticompetitive behavior. Ofcom said it volition reason its reappraisal and people a last study including immoderate concerns and projected recommendations wrong the 12 months.

Amazon, Microsoft and Google were not instantly disposable for remark erstwhile contacted by CNBC.

The reappraisal volition signifier portion of a broader integer strategy propulsion by Ofcom, which regulates the broadcasting and telecommunications industries successful the U.K.

It besides plans to analyse different integer markets, including idiosyncratic messaging and virtual assistants similar Amazon's Alexa, implicit the adjacent year. Ofcom said it is funny successful however services including Meta's WhatsApp, Apple's Facetime and Zoom person impacted accepted calling and messaging, arsenic good arsenic the competitory scenery among integer assistants, connected TVs and astute speakers.

"The mode we live, work, play and bash concern has been transformed by integer services," Ofcom's Chadha said successful a connection Thursday. "But arsenic the fig of platforms, devices and networks that service up contented continues to grow, truthful bash the technological and economical issues confronting regulators."

"That's wherefore we're kick-starting a programme of enactment to scrutinise these integer markets, place immoderate contention concerns and marque definite they're moving good for radical and businesses who trust connected them," she added.

Ofcom has been selected arsenic the enforcer of strict caller rules policing harmful contented connected the internet. But the legislation, known arsenic the Online Safety Bill, is improbable to travel into unit anytime soon aft Liz Truss replaced Boris Johnson arsenic premier minister. With Truss' authorities grappling with a plethora of problems successful the U.K. — not slightest the cost-of-living crisis — it's expected that online information regularisation volition determination to the backmost of the queue of argumentation priorities for the government.

The determination adds to efforts from different regulators to rein successful ample tech companies implicit the perceived stranglehold they person connected assorted parts of the integer economy.

The Competition and Markets Authority has respective progressive probes into Big Tech companies and wants further powers to guarantee a level playing tract crossed integer markets. The European Commission, meanwhile, has fined Google billions of dollars implicit alleged antitrust offences, is investigating Apple and Amazon successful abstracted cases, and has passed landmark integer laws that whitethorn reshape net giants' concern models.

Amazon holds a comfy pb successful the unreality infrastructure services market, with its Amazon Web Services part making billions of dollars successful profits each year. In 2021, AWS raked in $62.2 cardinal of gross and implicit $18.5 cardinal successful operating income.

Microsoft's Azure is the archetypal runner up, portion Google is the third-largest player. Other firms, including IBM and China's Alibaba, besides run their ain unreality arms.

Combined, Amazon, Microsoft and Google make astir 81% of revenues successful the U.K.'s unreality infrastructure services marketplace according to Ofcom, which estimates the marketplace to beryllium worthy £15 cardinal ($16.8 billion).

Microsoft precocious announced a fig of changes to its unreality declaration terms, efficaciously making it easier for customers to usage competing unreality platforms arsenic good arsenic Microsoft. The Redmond, Washington-based institution had faced complaints from rivals successful Europe that it was limiting prime successful the market.