Ofcom has updated its strategy and approach to digital markets, highlighting those areas on which it intends to focus its attention as well as some of its recent work.
Since it published its Digital Markets Strategy in September 2022, Ofcom has carried out work in the following areas:
- Cloud services market study: Ofcom conducted a comprehensive market study into cloud infrastructure services in the UK, concluding in October 2023. The study identified competition concerns, such as difficulties in switching providers and lack of interoperability, which could hinder innovation and drive up costs for consumers. Consequently, Ofcom referred the market to the CMA for further investigation. The statutory deadline for the CMA investigation to conclude is August 2025.
- Net neutrality guidance: In 2023, Ofcom updated its net neutrality guidance with the aim of ensuring that internet service providers (ISPs) treat all internet traffic equally. The revised guidance aims to support innovation and efficient network management by ISPs while maintaining consumer choice and access to diverse content.
- Personal online communications services (OCS): Ofcom published a discussion document in October 2023, examining competition and consumer issues in the OCS market. The study highlighted the strong market position of services like WhatsApp and the potential barriers to entry for new competitors. While current outcomes for consumers are positive, Ofcom will continue to monitor the sector for any emerging concerns.
- Connected TV platforms: Ofcom explored the role of connected TV platforms as digital content gateways, assessing competition and the availability of content. The findings indicated that while content providers can generally secure access to platforms, there are concerns about the prominence given to platform-owned content. Ofcom will prioritise implementing new rules under the Media Act 2024 to ensure public service broadcasters’ content remains accessible and prominent.
Future objectives
Ofcom’s next areas of focus will include:
- Looking at the impact of large digital firms on mobile broadband and connectivity and on the UK’s media sector.
- Monitoring digital infrastructure trends to improve its understanding of how digital infrastructure is developing and the effect of this.
- Monitoring interaction between Ofcom’s online safety duties and competition in digital markets.
Collaboration with the CMA
Ofcom is taking into consideration the CMA’s new role in the new pro-competition digital markets regime introduced by the Digital Markets, Competition and Consumers Act 2024.
The CMA is required to consult with Ofcom when exercising its digital markets powers may affect Ofcom’s regulatory remit. As well as this, Ofcom may make recommendations to the CMA about how it uses its digital markets powers. Ofcom and the CMA intend to publish a Memorandum of Understanding to formalise their collaborative efforts with the aim of ensuring a coherent approach to digital regulation.
More generally, Ofcom will continue to monitor communications and media sectors to identify potential risks and benefits of digital services for consumers and businesses. If it sees evidence that markets are not working in the interests of consumers, it will intervene if necessary to address this.
