Getting on the wrong side of the government can be dangerous even for the richest companies, as Amazon is rapidly finding out.
After losing the Pentagon’s JEDI cloud contract things have rapidly progressed from bad to worse, as the US Federal Trade Commission confirms they have launched an Amazon AWS antitrust investigation in Amazon’s Web Service cloud business.
At the current stage of the investigation, investigators are only probing competitors for evidence of anti-competitive practices by the cloud giant, which is estimated to have 48% of the market, vs Microsoft’s Azure’s 16%
Amazon stands accused of pushing their own second layer services such as databases, machine-learning tools and data-warehousing products over 3rd party clients for companies which use AWS, disadvantaging services companies which sell the same tools. With a monopoly share of the market, this anti-competitive behaviour would be illegal.
This is similar to Amazon pushing their own brand products on Amazon.com instead of products from competitors, something which again would be legal except for when a company has a monopoly share.
An Amazon AWS antitrust investigation can really hurt Amazon. The segment of the company was responsible for 60% of Amazon’s profit over the last 12 months. At the current stage, the investigation is unlikely to result in an enforcement action, however.