FTC is examining AWS for competition issues

FTC is examining AWS for competition issues

Amazon Web Services has the highest market share, even surpassing Google Cloud and Microsoft Azure. The FTC is looking into if Amazon is favoring the companies it is working with and punishing those working with its competitors.

Why is the US Federal Trade Commission examining AWS?

The US Federal Trade Commission has been contacting different companies to check whether there is an issue regarding competition from AWS, as per a report. The catalyst for this seemed to be when weeks ago, AWS had a major outage, causing several services such as Ticketmaster, Disney+, Flickr, and Netflix to be taken down in several countries.

Now, the FTC is looking into if Amazon is favoring companies it is working with and punishes those working with their rivals.

Is this a longstanding issue?

FTC’s current chairwoman Lina Khan was already has published the article “Amazon’s Antitrust Paradox” back in 2017 in Yale’s Law Journey arguing that regulators should treat Amazon as a public utility, otherwise, they should break up AWS and the Amazon Marketplace as separate entities.

In 2019, when Joe Simons was FTC Chairman, this investigation had already commenced. Other concerns were that Amazon has a significant volume of data on users. Thus, if it is struck with a cyberattack, users could suffer tremendously.

The JEDI cloud contract

AWS is also currently in competition with Google, Oracle, and Microsoft for the US Department of Defense’s JWCC contract (Joint Warfighting Cloud Capability), which is succeeding the JEDI project (Joint Enterprise Defense Infrastructure) which is has been plagued with legal issues since the summer.

The original contract had a worth of approximately $10 billion and was attained by Microsoft in 2019. However, this July the Pentagon shelved it stating that ‘due to evolving requirements, increased cloud conversancy, and industry advances, the JEDI cloud contract no longer meets its needs.”

After the award, AWS ended up filing a lawsuit. They were alleging that there was an error within the evaluation by the Pentagon of the bids by the cloud providers for the contract. Moreover, they said that during the Trump administration, the White House had unwarranted political influence for the selection of the bid.