South Africa wants to tackle Amazon, Google, Microsoft dominance in cloud computing

April 17, 2021

Minister of Communications and Digital Technologies, Stella Ndabeni-Abrahams, has published a proposed National Data and Cloud Policy, setting out government’s plan to tackle the issue of dominant market powers in the global cloud computing industry.

Amazon Web Services, Microsoft Azure, and the Google Cloud Platform are the three dominant cloud computing platforms in the world.

“The data and cloud computing market structure is dominated by a handful of large multinational companies. The concentration of data within this limited number of corporations poses a risk as it limits possibilities for the extraction of public value from data,” the draft policy stated.

“Furthermore, this lack of market competition has given consumers few alternative choices for the protection of privacy, and none are likely to appear.”

The proposed policy argued that many cloud providers make it difficult for smaller organisations and companies to move applications and workloads back and forth between private and public clouds.

“Limited migration between clouds is preventing organisations and companies from selecting the best cloud services and avoiding vendor lock-in,” it said.

“The playing field is therefore not level and does not allow for equal opportunity of participation between new entrants, including SMMEs, and big companies in South Africa.”

For South Africa, existing legislative frameworks would need to be adapted to provide for competitive and contestable markets, the draft policy has proposed.

“This is necessary because current policies and legislation were not designed to regulate competition in the digital economy,” it stated.

“The existing polices and legislation should be broadened to consider, for example, consumer choice, market structure, switching costs and lock-in effects.”

Competition law to be reviewed

The proposed policy recommended that South Africa’s competition law should be reviewed to address specific challenges relating to dominance in the cloud computing space by a few established players, and anti-competitive behaviour which might arise within the data and cloud environment.

This must take into consideration the free, accessible, interoperable, and reusable principles of data.

Other proposals include:

  • Review of legislation to ensure that local companies have a fair and equitable chance of competing with their global counterparts.
  • To support competition, the Open Data Strategy shall enable the development of a regulatory framework for exportability, interoperability, data portability, and data trading and sharing. The strategy shall also inform the development of sector-specific regulations.
  • Sector-specific regulators, supported by policy from relevant departments, shall develop regulatory frameworks to facilitate disruption for the purposes of fostering inclusion and reducing market concentration.

Proposed National Data and Cloud Policy

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