HomeCloud/NFVOfcom’s interim report points to anti-trust probe into UK cloud

    Ofcom’s interim report points to anti-trust probe into UK cloud


    Evidence so far suggsts market dominance and lack of openness are causes for concern

    Ofcom, the UK’s telecoms regulator has issued an interim report, having announced an investigation into the country’s cloud infrastructure market last September. In April, Ofcom said it would examine the cloud market in a “Notice of a proposal to make a market investigation reference under section 131 of the Enterprise Act 2002” to assess how much “the supply of those services has or may have effects adverse to the interests of consumers, and to assess the extent to which steps can and should be taken to remedy, mitigate or prevent any such adverse effects”.

    Interested parties

    Ofcom invited interested parties to submit their views on the subject or any objections to the investigation. BT, Google, Microsoft, Oracle, the UK Competitive Telecommunications Association (UKCTA), Virgin Media O2, plus two anonymised individuals did so.

    The interim report indicates that Ofcom is likely to ask the Competition and Markets Authority (CMA) to rule on the issue of how open the British cloud market is. Ofcom’s rationale is that the UK’s cloud market underpins just about all digital services in the UK but is dominated by AWS and Azure, with 60% to 70% of the market between them.  Google’s share is somewhere between 5% and 10%.

    Barriers and incentives

    Ofcom’s final report into the matter will be published on 5 October, but already it seems the regulator has decided that the market is not sufficiently open and competitive for all. For instance, while new customers can pick and choose supplier, established ones face serious barriers if they want to swap suppliers, such as exit fees.

    Ofcom also notes that data and applications must be reconfigured to run on different clouds, and that cloud providers are offering incentives such as “committed spend discounts” to encourage loyalty to a single provider.

    AWS and Microsoft are not keen on the CMA getting involved, claiming Ofcom doesn’t understand the workings of the global market etc. Microsoft in particular might dread the CMA’s involvement: in April the CMA blocked Microsoft’s proposed $68.7 billion acquisition of the gaming firm Activation Blizzard.