Expresses concern about the practices of Amazon and Microsoft due to their position in the market
MADRID, 5 Abr. (EUROPA PRESS) –
The Office of Communications (Ofcom) of the United Kingdom, the regulator of the telecommunications market in the country, has proposed this Wednesday to refer to the Competition and Markets Authority (CMA) the opening of an investigation of the infrastructure services market in the cloud, in which Amazon Web Services (AWS) and Microsoft have a combined market share of between 60% and 70%.
Last October, Ofcom decided to carry out a study in this regard and “at the midpoint” of its evaluation it has considered proposing to refer the sector to the Markets and Competition Authority for further investigation, having identified provisional characteristics and practices that make it difficult for customers switch to and use multiple cloud providers.
“We are especially concerned about the practices of Amazon and Microsoft due to their position in the market,” says the telecommunications regulator, which estimates the market share of Google, the country’s largest competitor, in a range of 5% to 10%. close to AWS and Microsoft, considered “hyperscalers”.
In particular, Ofcom points out that the features of the cloud services market that are of concern are related to egress fees, the charges that customers pay to transfer their data out of the cloud and that it may deter customers from using the cloud services. services from more than one provider or changing you to an alternative provider.
It also points out technical restrictions to interoperability, whereby leading firms can prevent some of their services from working effectively with the services of other providers and put additional effort on users to reconfigure their data and applications to work. in different clouds.
On the other hand, committed spend discounts may benefit customers by lowering their costs, but the way they are structured may incentivize users to use a single hyperscaler for all or most of their cloud needs, even when there are better quality alternatives available.
“These characteristics of the market can make it difficult for some existing customers to negotiate a good deal with their provider,” says Ofcom, for which there are signs that “this is already causing harm”, with evidence that cloud customers face significant price increases when they have to renew their contracts.
“We are concerned that limitations on customers’ ability to use more than one provider could make it difficult for smaller cloud providers to win business and compete with market leaders,” the regulator added, noting that revenue is already concentrated in few players, and there is a risk that the identified characteristics could cause the sector to “focus even more on market leaders”.
“High barriers to switch are already hurting competition in what is a fast-growing market. We believe deeper scrutiny is needed to make sure it works well for the people and businesses that depend on these services,” he said. Fergal Farragher, the Ofcom director responsible for the study.
In this way, Ofcom has opened a consultation period until May 17, in which it expects to receive comments on its provisional findings and on its proposal to propose a market investigation on the supply of cloud infrastructure services in the Kingdom. Kingdom, adding that it will publish a final report with its recommendations “no later than October 5, 2023.”
