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Conflict of interest concerns raised over CMA’s use of AWS UK public sector discount scheme

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(News seen on Computer Weekly first) As the UK competition watchdog is profiting from preferential pricing on the public cloud giant’s products, the Competition and Markets Authority ( CMA ) antitrust investigation into Amazon Web Services ( AWS ) may come under fire amid claims of conflict of interest.

The CMA is currently conducting an anti-competition investigation into the UK cloud market, which includes a thorough examination of how AWS and Microsoft’s favorable pricing schemes affect industry rivalry.

The CMA is one of 15 common sector organizations that have benefited from the same kind of favorable pricing agreement that the authority is now tasked with looking into, according to data shared with Computer Weekly by Public Sector-focused IT market watcher Tussell.

The revelation was expected to raise questions about how” fair and open” the CMA’s investigation into AWS is, according to Mark Boost, CEO of Stevenage-based cloud provider Civo.

He told Computer Weekly that” the investigation into AWS and Microsoft is a much-needed opportunity to make the cloud market really aggressive.” Providers all over the UK praised the decision to look into the hyperscaler providers. We sincerely hope that the CMA’s affiliation with AWS wo n’t affect how the investigation turns out.

A source in the UK tech market claimed that the situation raised concerns about how the investigation is then anticipated to proceed, despite the fact that it is understood that distinct and different teams are in charge of the cloud services market probe and the CMA’s procurement activities.

Does the fact that the CMA has been using AWS for a while, but that they are now also accessing discounts on its services, mean that it will eventually start looking into itself?

A representative for Computer Weekly declined to comment on the CMA’s response to questions about the steps it is taking to dispel claims that its use of AWS and its reduced pricing schemes constitute a conflict of interest.

The use of AWS by the CMA

The One Government Value Agreement ( OGVA ), a three-year preferential pricing-focused Memorandum of Understanding ( MoU) that AWS signed with the UK government in October 2020, is of particular benefit to the CMA.

The Crown Commercial Service (CCS), the government’s procurement division, confirmed to Computer Weekly late last month that it hoped to renew the agreement in due course after the OGVA actually expired in October 2023.

The OGVA offers committed spend discounts so customers can access larger savings on AWS services if they pay upfront for them, according to a deleted document that was shared with Computer Weekly by an expert on government cloud procurement contracts.

According to the document, the initial discount offered to public sector organizations that use OGVA is 18 %, with an additional discount of 2 % available to customers who pay for their services in full and up front.

According to Tussell’s data, the CMA obtained a 36-month contract with AWS valued at £191, 303 using the favorable pricing terms of the OGVAMoU. The authority’s anti-trust investigation into AWS and Microsoft is scheduled to end in April 2024, which is 12 months before this contract is set to expire.

The CMA is constantly benefiting from an AWS favorable pricing scheme while examining how the company’s pricing strategies affect market competition, according to Owen Sayers, a data protection expert and enterprise security architect at Secon Solutions, runs the risk of tainting the larger investigation.

The CMA are in a precarious position because they are legally qualified and ready to conduct the analysis, but they must be careful that their investigation does not become polluted and cannot be accused of being so, according to Sayers. The CMA is then responsible for developing a system to uphold the integrity of the investigation.

In order to immediately put an end to any claims of conflict of interest, he added, one way to accomplish this would be to appoint an impartial third party with” enough public standing” to hold an “overseer function.” &nbsp,

If they are unable to show that the inference of conflict of interest is absolutely unfounded, that is probably the best way for them to proceed this, Sayers continued.” Given the necessary constraints on total transparency for their investigation.”

CMA intervention in the UK cloud market and nbsp has previously been requested.

This is not the first instance of attention being drawn to the CMA’s use of AWS.

Computer Weekly is conscious that UK tech market watchers asked the CMA to look into how the government’s public cloud-first policy was affecting competition in the UK cloud sector a number of years ago.

Previous CMA CEO Andrea Coscelli reportedly received” correspondence” on this matter between May and June 2020, according to government sources, but Computer Weekly is aware that no action was taken as a result of time and resource constraints brought on by the Covid- 19 coronavirus pandemic.

A listing that confirmed the CMA had started a £72, 000, 12-month contract with AWS appeared on the UK government’s Contract Finder portal in July 2020, one month after this correspondence was exchanged.

One of the parties involved in that correspondence told Computer Weekly under the condition of anonymity,” We were incensed to learn then that the CMA was using AWS.”

In July 2021, a letter about the dynamic ramifications of the AWS OGVA deal was also written to former Cabinet Office minister Lord Agnew and co-signed by senior representatives from seven different UK-based cloud providers.

According to the letter, which was seen by Computer Weekly,” The US giant has secured three-year contracts with its current central government customers with complete contract values in excess of £330m and total monthly determined values of over £73m.”

” The multinational corporations are purposefully locking themselves into these sizable government contracts because they are aware that when the downpayment is made, the government will be adamant about not changing suppliers.” In order to intentionally undercut smaller private players in the beginning, AWS and the other major providers purposefully erect high barriers to entry before locking down their positions later.

According to Computer Weekly, Lord Agnew did not respond to the letter at the time.

The UK cloud market has suffered for years as a result of AWS and Microsoft’s favorable pricing strategies going unquestioned, according to Nicky Stewart, former head of ICT at the Cabinet Office. However, that has to change.

The OGVA was the last straw in the anti-competitive nature of the common sector cloud infrastructure market, which had been roiling the UK’s personal cloud industry for years. Perhaps if it causes some inconvenience in the process, it’s past time for the CMA to lance the boil, she continued.

Matthew Boyle

Matthew Boyle is a distinguished Smart City Consultant, renowned for his expertise in IoT (Internet of Things) and cutting-edge urban technology solutions. With a deep understanding of Smart City initiatives, Matthew excels in leveraging IoT innovations to transform urban landscapes into efficient, sustainable, and connected environments. His strategic insights and hands-on experience in urban planning, data analytics, and IoT implementation make him a trusted expert in the field. Matthew Boyle is your go-to consultant for navigating the complex world of Smart Cities, ensuring seamless integration of IoT technologies, and unlocking the potential of data-driven urban solutions. With his guidance, your city can thrive in the digital age, enhancing quality of life and fostering a sustainable future.

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