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CMA to double spend with AWS while overseeing anti-trust probe into cloud giant

The CMA has reignited concerns about how its use of AWS could constitute a conflict of interest, given the public cloud giant is the subject of an anti-trust probe by the watchdog

Caroline Donnelly
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Published: 14 May 2024 12:45

The Competition and Markets Authority (CMA) will double its cloud spend with Amazon Web Services (AWS) over the next 36 months, following the renewal of its controversial three-year hosting deal with the public cloud giant.

The CMA’s latest three-year deal with AWS went live on 1 May 2024, and is valued at £437,151, which is more than double the value of the previous cloud agreement the pair had in place, which was valued at £191,303.

The contract’s call-off document confirms the deal was arranged under the terms of the UK government’s G-Cloud 13 procurement contract, with the CMA set to benefit from preferential pricing on AWS’s products as per the terms of the One Government Value Agreement 2.0 (OGVA).

The second iteration of the UK government’s preferential pricing agreement with AWS went live in December 2023, and allows public sector IT buyers to purchase its public cloud services at discounted prices.

This is not the first time the CMA has benefited from the terms of the OGVA, as a Computer Weekly investigation confirmed back in November 2023 that the competition watchdog was among 15 public sector bodies to have received discounts on AWS services through the first iteration of the agreement.

As confirmed by Computer Weekly at the time, the CMA used the preferential pricing terms of the OGVA to take out a 36-month contract with AWS that expired in April 2024, valued at £191,303.

This revelation came just one month after the CMA announced in October 2023 an anti-trust probe into AWS and Microsoft, after an investigation by Ofcom uncovered evidence of anti-competitive behaviour by both firms.

Pricing schemes

Among the areas the CMA confirmed would be in-scope of its investigation is whether AWS and Microsoft’s preferential pricing schemes were harming competition in the UK cloud market.

While the start date for the offending CMA contract pre-dated its anti-trust probe into AWS and Microsoft by several years, the situation resulted in conflict of interest concerns being raised by public sector IT market watchers.

Among them was Nicky Stewart, former head of ICT at the Cabinet Office. Speaking to Computer Weekly this time around, she said the fact the CMA has renewed its contract with AWS with a year still to run on its anti-trust investigation into the company is concerning.

“Given that the CMA is investigating AWS for anti-competitive behaviour, 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 behaviour.”

Read more about the CMA probe into AWS and Microsoft

A CMA source has previously sought to bat away any suggestion that benefiting from discounts on AWS services would compromise the integrity of the watchdog’s investigation, because no staff from the organisation’s corporate and procurement teams are invested in the UK cloud market probe.

Regardless, Stewart said the situation serves to highlight how these types of preferential pricing and committed spend discount schemes are contributing towards the public sector becoming increasingly dependent on the technologies of the US cloud giants.

“Our government is responsible for negotiating and agreeing these types of discounts, which increase as consumption grows,” she said.

“Government is clearly doing nothing to put competitive tension back into a broken market and is clearly demonstrating how locked-in government – including the CMA – really is to AWS.”

Read more on Infrastructure-as-a-Service (IaaS)