Sources: FTC investigators, who have been looking into Amazon's e-commerce business, have begun asking software companies about Amazon's practices around AWS
- FTC said to broaden Amazon inquiry beyond online retail — Amazon's cloud business leads market over No. 2 Microsoft
Context & Ripple Effects
Two months after FTC officials began interviewing Amazon merchants about alleged abuse of marketplace dominance, investigators are widening the aperture to AWS — asking software companies what they've experienced with the cloud unit that leads the market over No. 2 Microsoft. The pivot matters because it moves the inquiry from retail margins into infrastructure, where switching costs run deeper.
The arc has legs: by late 2021 Lina Khan was advancing this same AWS probe, including whether AWS discriminates against non-exclusive clients, and Amazon had meanwhile been caught backing advocacy groups that target Microsoft's government cloud business — a sign both hyperscalers treat Washington as a competitive front.
First-order effects
- Software companies that sell through or alongside AWS are pulled in as de facto witnesses, giving the FTC testimony on pricing, exclusivity pressure, and data practices that merchant interviews alone couldn't supply.
- Amazon now faces scrutiny on two fronts simultaneously — retail dominance and cloud conduct — raising the compliance burden and the odds either line produces formal charges.
Second-order effects
- Microsoft, as the clear No. 2 in cloud, stands to gain if AWS is forced toward non-discriminatory treatment of rivals' software — and Amazon's funding of anti-Microsoft advocacy suggests it will keep fighting asymmetrically in policy channels rather than only in court.
- If software vendors perceive regulatory protection coming, their bargaining posture on AWS terms hardens, pressuring the discount-and-bundle structures AWS uses to lock in workloads.
Third-order effects
- The pattern holds forward: the same agency that widened this probe into AWS went on to open an antitrust investigation into Microsoft's cloud and licensing business in 2024, later accelerating it around enterprise software and AI — pointing toward durable regulatory treatment of hyperscaler cloud conduct as a standing antitrust concern rather than a one-off case.
- For the industry structure, the credible threat of cross-cloud investigations raises the cost of exclusionary licensing and bundling for every major provider, shifting competitive battles further into price, reliability, and AI capability.
The trend: Antitrust enforcement is migrating up the stack from retail marketplaces to cloud infrastructure, with the FTC running parallel probes into Amazon and Microsoft that make hyperscaler conduct a permanent regulatory battleground.