FTC Examines Potential AWS Competition Issues: Report

Amazon’s cloud unit has the most market share, followed by Microsoft Azure and followed by Google Cloud. Other major cloud infrastructure providers include Oracle and IBM.

The U.S. Federal Trade Commission has contacted companies to learn more about any competition issues from Amazon Web Services, according to a report.

The news comes weeks after a network issue with AWS resulted in the outage of multiple services, including Netflix, Disney+, Ticketmaster, Flickr and even on-premises services from the likes of ConnectWise.

The FTC might be looking into whether Amazon favors companies it works with while punishing companies that work with rival cloud providers, according to Bloomberg.

[RELATED: AWS Apologizes For Outage, Blames ‘Automated Scaling Activity,’ Outlines Fixes]

AWS is regarded as the cloud with the most market share, followed by Microsoft Azure and followed by Google Cloud. Other major cloud infrastructure providers include Oracle and IBM.

Amazon representatives did not return a request for comment. An FTC representative declined to comment or confirm the existence of an Amazon investigation.

The probe started in 2019 under the Trump administration with former FTC Chairman Joe Simons, according to Bloomberg.

Current FTC Chairwoman Lina Khan was appointed by President Joe Biden this year. Amazon filed documents before Khan became head of the agency seeking her recusal on any Amazon-related proceedings. In 2017, Khan published the Yale Law Journal article “Amazon’s Antitrust Paradox,” in which she argued that regulators could treat Amazon like a public utility or force the break off of Amazon Marketplace and AWS as distinct entities.

The ability of AWS outages to disrupt other large businesses – as seen during the outage in early December – was among the concerns over Amazon’s market share in Khan’s 2017 paper. Other concerns included the volume of user data Amazon has that could be exposed in a cyberattack and the lock-in of users created by the high cost of changing cloud providers.

AWS is also in competition with Microsoft, Oracle and Google for the U.S. Department of Defense’s multi-billion dollar Joint Warfighting Cloud Capability (JWCC) contract, the successor to the Joint Enterprise Defense Infrastructure (JEDI) project that got marred in legal woes over the summer.

The original JEDI contract — potentially worth up to $10 billion — won by Microsoft in October 2019 was shelved in July “due to evolving requirements, increased cloud conversancy, and industry advances, the JEDI cloud contract no longer meets its needs,” the Pentagon said in a statement at the time.

AWS filed a lawsuit following the contract award. The company alleged that the Pentagon erred in its technical evaluation of cloud providers’ bids for the contract, and that the White House under the Trump administration — including former President Trump himself — had undue political influence on the bid selection process.