United Kingdom communications regulator Ofcom is launching a market study to examine potential "competition concerns" between public cloud providers Amazon Web Services (AWS), Microsoft, and Google that if identified will lead to further action from the regulator.

This examination falls under the Enterprise Act 2002, and is part of a new program to ensure digital communications markets work well for both people and businesses in the U.K., according to Ofcom.

The regulator is looking at the health of the U.K. public cloud services market, where the top three hyperscalers together represent around 81% of the market's annual revenue. Specifically, Ofcom will examine the general strength of competition among public cloud services and dig into "the position the three hyperscalers hold in the market."

It will also look for competitive market dynamics that could be limiting innovation and growth.

The cloud market continues to evolve, the regulator noted, meaning it will study how the market is working today along with how it may change in the future. This supports Ofcom's goal to identify competition concerns early on and prevent them from becoming "embedded as the market matures."

The very way society functions "has been transformed by digital services," Ofcom Director of Connectivity Selina Chadha said. "But as the number of platforms, devices, and networks that serve up content continues to grow, so do the technological and economic issues confronting regulators. That’s why we’re kick-starting a program of work to scrutinize these digital markets [and] identify any competition concerns," Chadha explained.

Ofcom plans to publish findings within 12 months, which will include its concerns and proposed recommendations.

"If we find a market is not working well, there can be negative impacts on businesses and ultimately consumers, through higher prices, lower service quality, and reduced innovation," the regulator explained.

Ofcom can recommend changes to government regulation or policy, take competition or consumer enforcement action, refer the market for investigation by the Competition and Markets Authority (CMA), or accept undertakings itself instead of making a reference for market investigation.

Ofcom says it has been working closely with CMA to plan this market study, and while Ofcom will take the lead, it expects to continue collaborating with the group throughout the investigation.

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