Amazon’s massive cloud computing business is reportedly being scrutinized by U.S. antitrust enforcers, according to individuals familiar with the situation.
Bloomberg reports that U.S. antitrust enforcers are heavily scrutinizing Amazon’s cloud computing business, according to individuals familiar with the situation. FTC investigators have reportedly begun questioning software companies about the practices of Amazon’s cloud division, Amazon Web Services (AWS).
The FTC has already begun investigating Amazon’s conduct in its online retail business, now it appears that the commission is taking a more general look at the company overall to determine if its violating antitrust laws in other areas. Both the FTC and Amazon declined to comment on claims of an investigation into AWS.
AWS is massively dominant in the cloud-computing market and provides storage and computing power for multiple companies to host websites, run applications, etc. Amazon’s next biggest rival in the market is Microsoft’s Azure, Gartner Inc. puts AWS’s market share at 48 percent while Microsoft’s is 16 percent. AWS also accounted for 60 percent of Amazon’s operating income over the past 12 months.
AWS has been consistently profitable in recent years and has helped to keep investors happy as the e-commerce giant continues to spend heavily in order to expand its retail and logistics divisions. Amazon also sells a number of tools in conjunction with its AWS product such as databases, machine-learning tools, and data-warehousing products.
The FTC reportedly took issue with whether Amazon has an incentive to discriminate against software companies that sell their products to clients of AWS while simultaneously attempting to compete with Amazon. The FTC worries that Amazon could punish companies that work with other cloud providers and favor those that work with AWS exclusively.
The FTC’s inquiry into Amazon is part of a sweeping investigation of multiple Silicon Valley tech firms such as Google and Facebook by multiple agencies and levels of government. The House Judiciary Committee is examining the conduct of these companies as well as Amazon and Apple.