Wed. Aug 12th, 2020

U.S. Federal Trade Commission launches an antitrust investigation with Amazon

2 min read

Amazon’s AWS cloud computing service is the cloud service with the highest market share at present, and the Amazon cloud computing service market share in the US market is as high as 48%. Although Microsoft’s Azure cloud computing service has also developed rapidly, it’s market share is only 16%, which is still a huge gap compared to Amazon. It is worth noting that the US Department of Defense’s JEDI cloud service contract was recently awarded by Microsoft, and Amazon responded strongly to the US Department of Defense’s review of bids. Just then the U.S. Federal Trade Commission suddenly appeared, the commission has officially announced the launch of a preliminary antitrust investigation into Amazon’s cloud computing services.

For this antitrust investigation, it is estimated that even Amazon itself has not figured out what happened. The US Federal Trade Commission believes that there is a monopoly on Amazon’s marketing services. Under normal circumstances, after customers purchase basic cloud computing services at Amazon, Amazon also sells products such as databases, machine learning or data warehouses to customers. This kind of promotion is actually very common in all cloud computing platforms.

Amazon leak

The US Federal Trade Commission believes that Amazon’s marketing of these services under the premise of monopolizing the market will harm other small and medium service companies that provide similar services. In the end, Amazon’s approach may completely bankrupt these small and medium-sized service companies, and then turn the market for similar services into Amazon’s exclusive monopoly.

The US Federal Trade Commission is currently inquiring about Amazon competitors, including Microsoft, and the commission needs to gather evidence to assess Amazon’s damage. At this stage, the US Federal Trade Commission only initiates preliminary investigations. Therefore, it is possible to withdraw the investigation instead of continuing the investigation after the data collection and evaluation is completed. Of course, if Amazon is found to have a monopoly market, the consequences are also terrible. Now cloud computing services are one of Amazon’s pillar businesses. According to past practice, if a monopoly is determined, a huge fine is indispensable. What is more terrible than the fine is that Amazon must adjust the existing business model. This may cause greater damage to Amazon cloud computing services. Of course, for other cloud computing platforms, this may be an opportunity to seize the market.

Via: Bloomberg