The UK's Competition and Markets Authority is set to double its spend with Amazon Web Services (AWS) over the next three years.
The latest deal started on May 1, and is valued at £437,151, more than double the previous agreement between the two, reports Computer Weekly.
The cloud computing deal comes amidst the CMA's anti-trust probe into the cloud computing industry, of which AWS is one of the parties being investigated.
The CMA is set to benefit from a price reduction on AWS's products, per the terms of the One Government Value Agreement 2.0 (OGVA), a preferential pricing agreement made between the UK government and AWS in December 2023 which allows the public sector to get discounts.
A Computer Weekly investigation in November 2023 confirmed that the CMA has previously benefited from such discounts on AWS services through the first iteration of the OGVA.
Ironically, the CMA is currently conducting an anti-trust probe into AWS and Microsoft after Ofcom found evidence of anti-competitive behavior by both companies.
That investigation began in October 2023, and among the factors being investigated are discounts to incentivize customers to use only one provider.
At the time, Sarah Cardell, CEO of the CMA said: “We welcome Ofcom’s referral of public cloud infrastructure services to us for in-depth scrutiny. This is a £7.5bn market that underpins a whole host of online services – from social media to AI foundation models. Many businesses now completely rely on cloud services, making effective competition in this market essential.
“Strong competition ensures a level playing field so that market power doesn’t end up in the hands of a few players – unlocking the full potential of these rapidly evolving digital markets so that people, businesses, and the UK economy can get the maximum benefits.
Since then, the big three cloud providers have conditionally removed egress fees in an attempt to improve the appearance of competition.
Google was the first to make such a move, getting rid of its egress fees in January 2024 for customers looking to exit the provider. Microsoft Azure and Amazon Web Services (AWS) followed suit in March, with Azure taking a similar hard stance on exiting the provider to qualify. AWS does not require a full exit from its services but does have other stipulations including a rigorous approval process and allows only 60 days to complete the migration.
While the CMA's first AWS contract far outdates the probe, the latest renewal has raised some questions. Nicky Stewart former head of ICT at the Cabinet Office told Computer Weekly: “Given that the CMA is investigating AWS for anti-competitive behavior, this award will be construed as a clear conflict of interest,” she said. “Even more so if the CMA ultimately concludes that term and volume discounts don’t amount to anti-competitive behavior.”
The CMA anti-trust probe remains ongoing and is hoped to be concluded by April 2025, two years before the CMA's contract with AWS will finish.
