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House lawmakers accuse Google Cloud and Amazon Web Services for buying companies to “solidify and expand their dominance” (AMZN, GOOGL, GOOG)


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Congress has concerns about the acquisition strategies of Google and Amazon’s cloud platforms, according to a 449-page report released Tuesday by the House antitrust subcommittee, which accuses the firms of buying companies to eliminate rivals or lock customers into their clouds.  

The report described “serial acquisitions” from the platforms, “any one of which may seem insignificant but which collectively serve to solidify and expand their dominance.”

Google Cloud has acquired companies like Orbitera, Cask, Velostrata, Elastifile, and most recently, data analytics company Looker for a whopping $2.4 billion. Amazon, meanwhile, has acquired smaller startups like E8 Storage, Sqrrl, Graphiq, and Cloud9. 

The report accused both Google and Amazon of acquiring companies that worked with multiple clouds, but forcing them only to work with its own platform post-acquisition. These actions both take out competitors and potentially increase customers’ costs, the report says. 

“These concerns are especially acute today, given the combined national health and economic crises, which have widened the gap between the dominant platforms and businesses across the rest of the economy,” the report said.

Neither AWS or Google Cloud responded to a request for comment.

The report also says that there has previously been “significant missteps and repeat enforcement failures” in blocking anticompetitive mergers. For example, Google Cloud’s acquisition of Looker cleared the Justice Department, despite risks that this deal could get rid of an independent rival.

While it’s unclear if antitrust agencies are ready to challenge any past deals or if there will be more rigorous enforcement in the future, the opportunity may arise: Google Cloud plans to “invest significantly” in acquisitions, according to internal documents reviewed by the subcommittee staff.

Notably, this report did not target Microsoft, the second biggest cloud after AWS. Antitrust experts previously told Business Insider that Microsoft’s absence has less to do with its business practices, and more to do with its ability to fly under the radar when it comes to the scrutiny that’s followed its competitors as of late.

Do you work at AWS or Google Cloud? Got a tip? Contact this reporter via email at rmchan@businessinsider.com, Signal at 646.376.6106, Telegram at @rosaliechan, or Twitter DM at @rosaliechan17. (PR pitches by email only, please.) Other types of secure messaging available upon request.

SEE ALSO: The Congressional tech antitrust report raises concerns that Amazon’s practice of making ‘knock-off’ versions of open source software could stifle innovation

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Source:: Business Insider

      

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