According to an Entrepreneurng report, due to “serious worries” that large IT corporations are abusing their advantages, Amazon and Microsoft may be sent to the UK’s competition regulator for allegedly hurting competition in the online cloud services sector.
According to the British communications regulator, Ofcom, which said that it was “especially worried about the activities of Amazon and Microsoft because of their market position,” it is seeking to submit the entire sector to the Competition and Markets Authority (CMA).
Following the discovery of “provider behaviors that potentially raise barriers to switching and utilization of numerous providers,” it stated that it had “serious concerns.”
Companies and other interested parties have until May 17 to respond to Ofcom’s consultation, and on October 5 the regulator will decide whether or not to submit the industry to the CMA.
The market for cloud services, which offer convenient access to remote data centers for a fee, has expanded quickly over the past ten years to become a crucial foundation for many of the largest websites and online services available today, including video streaming mobile apps and official government websites.
In particular, Amazon and Microsoft’s soaring global revenues can be attributed to this expansion. According to Ofcom, Amazon Web Services (AWS) and Microsoft Azure hold between 60% and 70% of the UK market. The closest rival of the two was Alphabet-owned Google, which held between 5% and 10% of the UK market.
A cloud services sector probe would add to the regulatory monitoring of the UK’s large digital businesses. The Financial Conduct Authority is looking into whether firms like Apple, Google, and Amazon could hurt competition in the UK’s financial services industry, while the CMA has previously stated that it will strengthen its authority to look into major internet firms under its digital markets branch.
The government plans to publish legislation this month that would give the watchdog the authority to fine a company up to 10% of its global turnover. The CMA already has broad authority to demand that businesses with business models that are found to distort competition change them. The digital markets, competition, and consumer bill will also enable the CMA to request a ban on individuals serving as acting business directors in the UK.
Customers who move providers utilize numerous providers at once, and smaller providers’ ability to compete is all allegedly made harder by the claimed activities.
“The UK has a flourishing and diverse IT market with customers being able to pick from a wide variety of IT services,” an Amazon spokeswoman stated.
According to the spokesperson, AWS’s “freedom to build the solution that is right for them, with the technology of their choice,” had “driven increased competition across a range of sectors in the UK economy by broadening access to innovative, highly secure, and scalable IT services,” and had “driven increased competition in the IT services market.”
Conclusion
A Microsoft spokeswoman said we remain dedicated to ensuring the UK cloud industry remains highly competitive, and to supporting the revolutionary potential of cloud technologies to help accelerate growth throughout the UK economy.
Source: The GuardianÂ
