UPDATED 13:24 EST / DECEMBER 23 2021

POLICY

Report: FTC Chair Lina Khan is advancing an investigation into AWS

U.S. Federal Trade Commission Chair Lina Khan is advancing an investigation into Amazon Web Services Inc.’s business practices, Bloomberg reported on Wednesday.

Also on Wednesday, Reuters reported that the FTC has asked several companies to “gather information about competition issues” related to AWS. The FTC is said to have made the requests over the last few months. 

The move is reportedly part of an investigation into AWS that began several years ago. According to a 2019 Bloomberg report about the investigation, FTC officials asked multiple software companies that work with AWS whether the cloud giant had harmed the competition or violated antitrust laws.

The 2019 report also provided a number of other details about the probe. It stated that the FTC could examine whether AWS was favoring companies that work exclusively with its cloud at the expense of companies that also work with competitors.

AWS is the leading player in the public cloud market, with revenues of $16.1 billion last quarter. The Amazon.com Inc. unit not only boasts a lead over rivals but is also growing at a rapid pace that has accelerated recently. The $16.1 billion in revenues AWS posted last quarter represents a 39% year-over-year increase, a significant improvement over the 29% year-over-year increase it logged 12 months earlier. 

AWS’ policy towards companies in its ecosystem is not the only aspect of Amazon’s business operations said to be facing regulatory scrutiny. In July, it was reported that the FTC had launched an investigation into the company’s proposed acquisition of MGM Holdings Inc. for $8.45 billion. 

In June, Amazon petitioned the FTC to have Chair Lina Khan recused from antitrust investigations focused on the company. Amazon argued that Khan  should be recused because “she has on numerous occasions argued that Amazon is guilty of antitrust violations and should be broken up.” According to Amazon, “these statements convey to any reasonable observer the clear impression that she has already made up her mind about many material facts relevant to Amazon’s antitrust culpability.”

AWS is a key pillar of parent Amazon’s business strategy. Amazon’s flagship e-commerce marketplace and other services run on AWS infrastructure. The $16.1 billion in revenue the cloud giant generated last quarter accounted for 15% of Amazon’s total sales. AWS is furthermore a major contributor to its parent company’s operating income: The cloud provider accounted for $3.5 billion of Amazon’s $4.9 billion operating income last quarter.   

Image: Amazon

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