U.S. FTC seeking information on cloud providers' market power

The FTC said it is seeking information from the public on cloud computing companies' business practices

March 23, 2023 09:45 am | Updated 09:45 am IST - WASHINGTON

File photo of FTC Chair Lina M. Khan

File photo of FTC Chair Lina M. Khan | Photo Credit: REUTERS

The Federal Trade Commission said Wednesday it is seeking information from the public on cloud computing companies' business practices including details on their market power, competition and potential security issues.

The U.S. cloud computing business is dominated by four providers that include Alphabet's Google, Amazon Web Services Inc., Microsoft Corp., and Oracle Corp . None of the companies immediately responded to a request for comment.

"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.

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FTC staff are interested in the impact of cloud computing on industries including "healthcare, finance, transportation, e-commerce, and defense," according to a 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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