UPDATED 12:50 EDT / DECEMBER 05 2019

POLICY

Report: FTC antitrust officials are investigating Amazon’s AWS cloud business

Officials with the U.S. Federal Trade Commission are reportedly investigating whether Amazon.com Inc.’s cloud computing business, Amazon Web Services Inc., has violated antitrust laws.

Bloomberg broke the news Wednesday evening, citing unnamed sources who weren’t authorized to talk with the press about the matter. Details are slim for the time being, and Bloomberg said the agency may not end up taking any enforcement action. Amazon declined to comment.

The tipsters said the FTC has reached out to software companies that work with AWS for information regarding its cloud unit’s practices, but didn’t specify what potential antitrust violations the agency is looking into.

The probe comes at a time when AWS actually faces more credible competition, specifically from Microsoft Corp. but also, more distantly, Google LLC. On Tuesday at AWS’ annual cloud conference re:Invent, Jassy singled out Microsoft for what he termed some restrictive new licensing rules that limit how businesses can deploy Windows and SQL Server software with existing licenses on other clouds.

But in antitrust cases, market leaders such as Amazon can face more stringent standards on their practices and their potential impact on competitors.

Bloomberg speculated that the agency may be trying to determine if AWS discriminated against competitors. In the age of pervasive cloud adoption, many software firms either run their applications on AWS’ infrastructure or make them available to the provider’s customers via its third-party software store, Amazon Marketplace. Some third-party applications compete with native services offered by AWS. 

The FTC’s reported investigation adds a new dimension to the growing regulatory scrutiny around Amazon. In September, word emerged that the agency had launched a formal probe into the company’s e-commerce business and started gathering input from merchants who use its marketplace. A report published a month earlier suggested that antitrust officials are focusing their attention on Amazon’s product distribution partnership with Apple Inc., which forced some independent Apple resellers to stop selling their wares via Amazon.

The European Union is pursuing an investigation of its own that likewise focuses on the company’s treatment of independent merchants. That probe aims to uncover if Amazon used data it collects about sellers on its e-commerce marketplace to unfairly boost its own products.

Amazon is part of a group of leading tech companies that are all facing increased scrutiny over issues ranging from privacy to suspected anticompetitive practices. Google LLC and Facebook Inc. are the subject of multistate antitrust probes, while Apple is fighting a class action lawsuit that alleges it overcharges consumers for apps through monopolistic practices. 

Photo: John Taylor/Flickr

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