FTC Moves Forward With Antitrust Probe of Amazon Cloud Computing

The antitrust activity of big tech continues with the FTC moving forward with an antitrust probe of Amazon.

It’s been a rather busy month on the antitrust front this month. In fact, there is so much activity, it’s basically the second wave of antitrust action by authorities. The first wave started around 2019. At the time, many in the media called it a day of reckoning for “Big Tech”. Some even drew comparisons between the action and the antitrust action the government took against Microsoft in the 90’s and early 2000’s. Will the same happen for “Big Tech”?

Well, as it turns out, the answer was “no” – at least in the first wave. Multiple lawsuits against Google and Facebook ended with dismissal. Many critics of “Big Tech” were left disappointed. Some had fears that those efforts might have been flawed and needed more time to develop. As it turns out, those nagging fears became the reality. The wave of antitrust action came to a crashing halt.

Authorities weren’t exactly giving up after suffering an admittedly embarrassing defeat. In August of 2021, the FTC (Federal Trade Commission) issued an amended antitrust lawsuit. This as an effort to resurrect the antitrust movement against “Big Tech”. That new court filing would ultimately be the start of the second wave of antitrust action. The case appeared to be weak on the outset, but it was an effort to revive the effort, nevertheless. Facebook, for its part, attempted to block the lawsuit outright, but failed to do so. While the judge was skeptical about the success of the lawsuit, the judge wasn’t convinced to block it – meaning the antitrust effort is still alive.

While that was happening, the lawsuit by a coalition of US States was appealed in an effort to try and resurrect their side of the case. The details aren’t anything new. This is the one that alleged that Facebook and Google colluded to corner the ad market – though major outlets seem to be reporting this as new revelations. Whether it is a sell job or a short attention span, we aren’t really sure. Whatever the reason, the major media outlets are playing this up as some new shocking revelation that makes this case a slam dunk. This despite the details being known for years now.

We are also learning that the antitrust action is continuing with the FTC. This time, the target is Amazon. Specifically, the FTC is moving forward with an antitrust probe on Amazon’s cloud computing sector. From BNN:

The U.S. Federal Trade Commission is pushing forward with antitrust scrutiny of Amazon.com Inc.’s cloud computing business, according to people familiar with the matter.

Lina Khan, the head of the agency and a vocal critic of the online retailer, is advancing a probe started several years ago by her predecessor.

FTC investigators have contacted companies in the past few months to gather information about competition issues related to Amazon Web Services, said the people, who declined to be named because they weren’t authorized to speak publicly about the outreach. At least one of the contacts was as recent as the past few weeks, said one of the people.

The focus on Amazon’s $16 billion cloud business, which brings in most of the e-commerce giant’s profit, comes as Khan has set her sights on conduct by the biggest U.S. tech companies. Khan, a former Columbia Law School professor, rose to prominence in antitrust circles warning about the threats companies like Amazon pose to competition in the digital economy.

Amazon fell almost 1% to $3,381 in New York after Bloomberg reported the news.

We are, of course, in the early days of this investigation. So, it’s difficult to know how strong the case is at this stage.

Antitrust action against “Big Tech” isn’t exclusive to the US these days. Google has been facing antitrust action in Germany. Meanwhile, Dutch regulators have been hitting Apple as well for antitrust related issues. As a result of those alone, the antitrust action against “Big Tech” has become increasingly a global movement.

With so many angles hitting the large players in the world of technology, it’s going to get increasingly difficult to fend off antitrust action. Different jurisdictions are going to have different rules, measurements, and expectations on this front. An argument for antitrust action may work in one jurisdiction, but not another. Even the most modest forms of success is going to be seen by others as blood in the water, inspiring other actions to move forward. The more actions that are taken at the same time, the more difficult the larger players will find defending themselves. So, it’ll be interesting to see where these actions go next.

Drew Wilson on Twitter: @icecube85 and Facebook.

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