Amazon bankrolling industry lobbying against Microsoft Azure should surprise no one
Coalitions battling Windows giant's software licensing are funded by AWS, report indicates
Updated Amazon has reportedly been financing trade groups to discourage the award of large government cloud contracts to Microsoft Azure.
According to Bloomberg, efforts to complain about Microsoft's cloud being anticompetitive – ostensibly by groups like the Cloud Infrastructure Service Providers in Europe (CISPE), the Coalition for Fair Software Licensing (CFSL), and Alliance for Digital Innovation (ADI) – have been covertly funded largely by Amazon.
These collectives argue Microsoft unfairly locks customers into Azure, or makes it difficult or too expensive to run its software in rival clouds – such as Amazon Web Services, or AWS – and thus the Windows maker should be taken to task by watchdogs and possibly even blocked from competing for government deals and other IT contracts.
Despite the insistence of these organizations that they operate independently, Bloomberg claims a review of tax records and business documents and interviews indicates "Amazon Web Services plays a direct role in shaping their efforts in ways that would boost the cloud giant."
An example of this would be the CFSL's effort in June to convince the US Federal Trade Commission to "open an investigation into Microsoft's anticompetitive software licensing practices." The CFSL conducted a similar campaign in 2022.
"We do not discuss specific members," a spokesperson for the CFSL told The Register. "However, we can share that the coalition was founded by a diverse group of organizations, primarily customers, impacted by unfair software licensing practices.
"Our mission is to advocate for the industry-wide adoption of the Principles of Fair Software Licensing to resolve customers' concerns with restrictive software licensing in the cloud. We encourage Microsoft and all legacy software providers to adopt the Principles of Fair Software Licensing, which would benefit all of their customers."
The report also claims that an Amazon executive who sits on the board of ADI authored congressional testimony and letters submitted to the Feds by the group in 2020 – a claim Amazon denies.
Should have read El Reg
Regular readers of The Register will not find Bloomberg's report surprising. We've previously pointed out Amazon's close relationship with industry groups lobbying against Microsoft and its Azure cloud. For instance in just the past few months:
- In May, we noted AWS was a conspicuous member of CISPE as that coalition battled Microsoft in Europe over claims of unfair software licensing.
- In June, as Google Cloud spilled the beans on the controversial ways Microsoft keeps customers in Azure, we again observed AWS was a key member of CISPE.
- By July, it was clear AWS was backing CISPE as Europe's antitrust cops readied a probe into Microsoft.
- And last month we had good reason to believe the CFSL was being supported by not just AWS but Google as well.
AWS has made its unhappiness with Microsoft's software licensing rules no secret, complaining to regulators and in public about Redmond's regime.
Amazon argues that corporations work with trade organizations all the time, and that it does so in the interest of customers.
"Enterprises in every major industry have long worked with trade associations," Shannon Kellogg, VP of public policy for AWS, told The Register. "For AWS, trade associations provide an efficient way to engage with the community, gather feedback, and talk with a variety of stakeholders about the technologies, practices, and policies impacting our customers."
Kellogg declared that AWS is proud to support a variety of such groups – including the aforementioned Alliance for Digital Innovation, Cloud Infrastructure Service Providers in Europe, the Coalition for Fair Software Licensing, and dozens of other trade associations like the Computer & Communications Industry Association, Data Center Coalition, Information Technology Industry Council, Professional Services Council, and the US Chamber of Commerce.
"Our work with trade associations is driven entirely by doing what’s best for our customers, and to suggest otherwise is entirely false," argued Kellogg. He confirmed that Amazon does collaborate with ADI, but insisted it did not author the group's comment to the FTC.
The FTC declined to comment, and cited a general policy of not doing so when it is involved in an investigation.
Mind the turf
Astroturfing – in which companies pay a non-profit or public relations firm to promote an agenda to make it look like a grassroots movement – is commonplace in the tech sector.
Last year, for example, CNBC reported that Amazon and Google had funded an apparent grassroots movement of small business owners who opposed oversight of Big Tech. And in 2017, the Campaign for Accountability published a report outlining Google's efforts to influence policymakers through academics and experts. Google responded that the Campaign for Accountability has been funded in part by Oracle, which at the time was locked in a high-stakes copyright battle with Google over Android's use of Java.
The public has little recourse against this kind of deception under the current regulatory regime
A 2019 article in the Iowa Law Review argues that astroturfing is inherently deceptive and that current laws are inadequate to deal with the practice.
"Consumers and investors are being manipulated and deceived by groups who are shielded from accountability through their use of front groups and public relations firms," wrote author Matthew Scott. "The public has little recourse against this kind of deception under the current regulatory regime."
Scott urged the FTC and the US Securities and Exchange Commission to: revise the Uniform Deceptive Trade Practice Act to recognize that astroturfing is deceptive; to modernize disclosures to shareholders to clarify causes funded by businesses with vested interests; and ensure that material associations between for-profit entities and nonprofits or public relations firms are made public.
It should be said, however, that there are times when quiet support for lobbying efforts that attack a dominant market rival may be necessary – to avoid retaliation, and to keep the focus on the merits of the proposed intervention, for instance.
The Register asked CISPE, ADI, and Microsoft to comment, and we've not heard back. ®
Updated to add
In a statement to The Register after this story was published, a spokesperson for CISPE said the group "has always been transparent on its members and clear that AWS is among them. However, our governance, which requires a double majority of European and SME members for all decisions, ensures that no single company can drive our agenda or actions."