On March 22, 2023, the Federal Trade Commission (FTC) issued a Request for Information (RFI) seeking public comment on business practices in the cloud computing industry. RFI focuses on his three intertwined aspects of cloud computing. (2) cloud cybersecurity; (3) the risk of a “single point of failure” – the idea that a single malfunction could undermine a critical system; Underlying the FTC’s focus is a clear concern that market consolidation of cloud computing can affect competition, data security, and data availability.
RFI closely follows the National Cybersecurity Strategy announced by the White House on March 2, 2022. This heralded, among other things, potential regulation of cloud service providers (CSPs), including a rule that would shift most of the cybersecurity responsibility to his CSP. The initiative began as U.S. and foreign regulators increased scrutiny of the largest of his CSPs, recognizing the growing role of cloud computing in domestic and global economic infrastructure.
Identifying “single points of failure”
The issues the FTC seeks to explore are embodied in a list of 20 detailed questions. Half of them focus specifically on issues related to the competitive dynamics of cloud services, while the rest are devoted to broader issues surrounding data security and potential industry shortcomings or vulnerabilities. Given the increasingly important role the cloud plays in government and business, RFI believes that large cloud infrastructure providers have become a “single point of failure”, creating serious and cascading economic and security threats. reflect concerns that it may cause damage to
These concerns echo FTC Chairman Lina’s view of what she sees as dangerously high levels of market concentration in many sectors of the economy, particularly those in which “big tech” companies are included in a minority. • Closely accords with the well-known critique by Khan. major player. According to these criticisms, critical industries can become “vulnerable” in the face of difficult conditions. This is because market consolidation and concentration reduce incentives for major industry players to invest in product improvement and resilience. His RFI in the Cloud His Computing is his one of many steps Khan took during his tenure at the FTC. To increase scrutiny of industries deemed overly concentrated, and to identify and deter anti-competitive practices that may lead to (or entrench) market power.
Investigating competitive practices
The competition portion of the RFI examines the cloud computing market dynamics and then examines the practices cloud providers use to “strengthen or secure their position” and “link, tie or bundle” with cloud services, etc. Discuss the incentives offered to our cloud customers. Other services offered by cloud providers. This series of investigations raises suspicions that his CSP at large may employ self-first tactics and contractual methods to discourage customers from switching to his competing CSP. is shown. This includes questions that probe how tied a customer feels to a vertically integrated set of services across a particular CSP’s cloud stack. They are also trying to understand whether the large CSP’s customers are able to negotiate contracts, or if there is an imbalance in bargaining power that forces customers to accept the “take it or leave it” terms demanded by the provider. is.
An FTC initiative is tracking similar efforts in other jurisdictions. For example, last year, in response to complaints from European cloud providers, the European Commission launched an investigation into Microsoft for alleged anti-competitive practices in cloud computing related to Microsoft’s licensing agreements. Complaints centered around bundling issues such as the Azure Hybrid Benefit program, which incentivizes customers through discounts to run Windows Server on Azure instead of competitors’ cloud infrastructure. Microsoft has responded by amending its licensing agreement to allow customers to use licenses with European cloud providers and to purchase licenses for virtual environments without being obligated to purchase physical hardware. . The FTC also cites investigations into cloud computing by authorities in the UK, France, South Korea, the Netherlands and Japan.
Additionally, in line with the FTC’s continued interest in emerging technology issues, the RFI includes questions focused on artificial intelligence (AI) and AI’s dependence on cloud-based services. future. “
In announcing the RFI, the FTC cited the National Security Agency’s conclusion that “misconfiguration of cloud resources remains the most common cloud vulnerability.” As such, RFI’s questions range from the range of CSPs competing on security-related standards to concerns about “how responsibility for protecting customer personal information should be shared between cloud providers and their users.” Until now, we have dealt with various issues. The questions examine the types of security-related information CSPs share with their customers and the extent to which providers are liable for breaches of customer data.
If RFI leads to rule-making, CSPs are ready to demonstrate how their systems protect consumer data through network recovery capabilities with well-tested and appropriate fail-safe techniques and network redundancy. must be Also, current and future cloud users should track the RFI process. The RFI process gathers information from a wide range of stakeholders and develops the resulting rules to assess the suitability of cloud services for business needs and whether additional customer-imposed security measures are appropriate.
- The deadline for submitting feedback on FTC questions is May 22, 2023.
- The agency encourages participation in the RFI process by a variety of stakeholders, including “users of cloud services, academics, civil society groups, industry stakeholders, and others.”
- The FTC may use your responses to focus further investigation. The RFI also shows that the FTC could use its rule-making process in ways that could have far-reaching and far-reaching effects that can be felt in the tech sector and beyond.
- Potential regulations in this area could cover both competition practices in the industry and industry practices regarding the protection of consumer data.
- When the FTC conducts rulemaking activities, stakeholders have additional opportunities to provide feedback specific to the proposed rule.
- Cloud-focused CSPs and others may wish to use the FTC’s RFI process as an opportunity to educate the FTC on market facts important to their perspective. This will help guide subsequent action by the FTC.