FTC seeks info on Cloud majors and business practices

The Federal Trade Commission (FTC) said it is seeking information on cloud computing companies from the public on their business practices including details on their market power, competition and potential security issues.
Cloud share of AWS, Microsoft, Google in Q3 2022The U.S. cloud computing business is dominated by four providers including Amazon Web Services (AWS), Microsoft, Alphabet’s Google and Oracle.

The share of cloud computing providers is AWS (32 percent), Microsoft (22 percent) and Alphabet’s Google (9 percent).

Research firm Canalys estimates that cloud marketplaces, a platform for selling technology, will grow to over $45 billion by 2025, representing an 84 percent CAGR.

The size of cloud computing market is forecast to grow from $552.3 billion in 2021 to $1,119.5 billion in 2026, according to GlobalData estimates.

“Swathes of the economy now seem reliant on a small number of cloud computing providers,” said FTC Chair Lina Khan on Twitter. She added that the FTC “is seeking public input on how the current market structure and business practices of cloud providers affect competition and data security.”

The FTC and Justice Department under President Joe Biden have taken a strong stance against the perceived abuse of market power by challenging numerous mergers, cracking down on what it calls “junk fees”, and other actions aimed at giving consumers more say in the services they use.

Recently, regulators have started to focus on the cloud. Europe’s antitrust authority began probing Microsoft’s licensing agreements that discouraged rival cloud usage, prompting changes by the company in October that critics still called insufficient. Fees to take data out of various providers’ clouds have also drawn scrutiny from smaller players.

FTC staff are interested in the impact of cloud computing on industries including “healthcare, finance, transportation, e-commerce, and defense,” according to its press release.

The public will have until May 22 to submit a comment on the FTC “Request for information”.

The agency is asking for comments on which segments of the economy rely on a handful of cloud service providers, detail on contract negotiations, incentives to buy more services from a single provider, detail on services provided and information on notifications related to security.

The consumer protection agency noted it has targeted companies that failed to put in place security safeguards to protect data stored on third-party cloud computing services including one involving the alcohol delivery platform Drizly and another focused on education technology provider Chegg.

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