US FTC Seeks Information on Cloud Computing Companies’ Business Practices

The Federal Trade Commission said on 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 US cloud computing business is dominated by four providers that include Amazon.com, Microsoft, Alphabet‘s Google and Oracle. 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.

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.

© Thomson Reuters 2023

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