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Out-Law News 1 min. read

UK cloud services market to be studied by Ofcom

The UK’s cloud services market is to be assessed by regulators to determine how well the market is working now, and how it is likely to be developed in future.

Ofcom, the UK’s telecommunications regulator, announced that the market study would be its “main area of work” in relation to digital market regulation (25-page / 3.3MB PDF) over the next year or so.

Ofcom said the focus of its study will be on how well the market for cloud infrastructure is operating, rather than on the market for software-as-a-service (SaaS) solutions. It said that it will assess the strength of competition in cloud services, the position that the largest providers hold in the market, whether it is difficult for other providers to compete and any other adverse impacts on consumer outcomes generally.

“The purpose of our market study is to explore if the market is working well,” Ofcom said. “We will assess where competition concerns exist or could exist in the future, and at a high level consider how any such concerns could be addressed, while recognising that a full examination of this would, if necessary, be the subject of separate further work. We will look at how the market is working today and how we expect it to develop in the future. We believe this is particularly important in this study given the sector is still evolving, and there may be scope to identify potential competition issues before they become embedded.”

Ofcom has pledged to “invite initial views” on the market when it opens its market study, to consult on its interim findings, and to publish its final report within 12 months.

Another area of work that Ofcom will undertake includes an assessment of competition in “digital content gateways” – in particular, connected televisions, smart speakers and the supporting digital assistants and operating systems.

“Our work on digital content gateways will seek to ensure continuity of competition and consumer outcomes,” it said. “Poor competition outcomes could have the potential for a significant impact on UK broadcast and content creation markets, ultimately impacting on the range, quality or pricing of content available to consumers. Our first step will be to consider whether there are any potential underlying competition issues and if so what options might be available to address these.”

Ofcom said it also plans to assess the impact of WhatsApp, Zoom and other online personal communications services will have on traditional calling and messaging markets.

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