Ofcom will scrutinize the world’s biggest tech companies to ensure their dominance in areas like cloud computing, messaging and smart devices works for people and businesses in the UK, the communications regulator said.
The study of cloud services, which will take precedence out of the three topics, will deal with Amazon, Microsoft and Google.
Together, these “hyperscalers” control more than four-fifths of the UK’s cloud computing market, of which Amazon accounts for about half.
Over the coming year, the regulator will begin examining a wider range of digital services. WhatsApp, FaceTime and Zoom come under scrutiny, with Ofcom examining how their market power affects traditional calling and messaging and whether the lack of interoperability “raises potential concerns”.
Smart speakers like Amazon’s Echo, Google’s Nest and Apple’s HomePods are being scrutinized alongside smart TVs and digital personal assistants to ensure their impact on consumer behavior isn’t distorting the market for TV, radio and online content.
Selina Chadha, Director of Connectivity at Ofcom, 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 deliver content continues to grow, so do the technological and economic challenges regulators face.
“That’s why we’re embarking on a program of work to examine these digital markets, identify competitive concerns, and ensure they work well for the people and businesses that rely on them.”
The cloud study, which begins in the coming weeks, “will examine the strength of competition in cloud services in general and the position of the three hyperscalers in the market,” the regulator said in a statement.
“We will also consider any market characteristics that could limit innovation and growth in this sector by making it difficult for other companies to enter the market and increase their share.
“How well digital markets perform is becoming increasingly important to the outcomes consumers experience in the sectors we regulate. We also need to be mindful of how businesses use digital infrastructure and services, like cable, towers and satellites, which we have focused on in the past.”
The investigations are being carried out under the Enterprise Act 2002 which gives Ofcom the power to issue market studies in digital communications markets and investigate potentially unfair commercial practices and contract terms.
Ofcom is expected to gain further powers to regulate internet content providers under the Online Safety Act. Originally scheduled to be passed before the summer recess, the law was dropped due to time constraints, but incoming culture secretary Michelle Donelan has promised to proceed with the legislation with some changes.