Amazon cloud outage took down millions of sites – and highlighted the risks of overdependence

Days after Amazon’s cloud services company AWS plunged millions of popular websites and apps into the dark, questions still remain about why we are so dependent on a handful of companies in the first place — and why another outage might be difficult to prevent.

reminded me of last year crowdstrike outage and this rogers outage In 2022, Monday’s disruption demonstrated how many corners of the economy depend on a single company.

Snapchat, Pinterest, Reddit, and Spotify shut down. starbucks app — with DoorDash and Grubhub — struggled to take food orders and the Lyft app had trouble connecting drivers with riders. Some? Venmo Users couldn’t transfer money, and some Zoom users couldn’t make video calls.

Streaming services like Netflix, Disney+ and Amazon’s own Prime Video were affected, and messaging services WhatsApp and Signal experienced problems. UK government websites stopped loading properly, as did some platforms It is used by the National Health Service,

As Atlantic writer Will Gottsagen keep itTechnical disruptions occur – “But under our current system, a bad day for Amazon can be a bad day for everyone.”

And the current system is one in which AWS captured almost a third of the global cloud services market during the second quarter of this year, with Microsoft Azure and Google Cloud not far behind.These three companies own more than 60 percent of the cloud market.

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so how are the companies Ballooning to capture a larger share of a particular market?

Experts who spoke to CBC News say there are several ways to do this. Although some companies may be early innovators who naturally move ahead of their competitors, many of the world’s largest companies have been accused or investigated of using anti-competitive measures to stay on top.

Success creates a ‘snowballing effect’

Last July, Britain’s antitrust regulator published a report Alleged that AWS’s large share in the country’s cloud services market is harming competition and recommended an investigation. Parent company Amazon hit back, saying the report ignored “clear evidence of strong competition.”

Amazon was also accused of maintaining monopoly power in the United States through deceptive practices related to its Prime service several years ago. The company did not admit its mistake This is what Amazon and its officials say “Have always followed the law,” but agreed to settle the matter With a historic US deal worth $2.5 billion this year.

When market power is held by a single company (a monopoly) or dispersed among a small number of companies (an oligopoly), it can “create fragility and a lack of resilience in our economy,” said Robin Shaban, co-founder and president of the Canadian Anti-Monopoly Project.

Some companies that operate in the digital sphere — like ridesharing apps or social media platforms — grow faster because they have “unique features that make them more valuable the more people use them,” Shaaban said.

“The more users you have, the more accounts you have, the more useful the platform is. And so it creates a bigger impact,” Shaaban said. “A company dominates a market because it is the most effective way for that company to make a profit.”

Supersized businesses can also grow from a merger between two larger companies or from “killer acquisitions,” Shaban said, the latter describing instances when a larger company buys smaller companies that might otherwise become major competitors.

Many markets in Canada are controlled by a few large companies, including grocery, Airlines And bankingBut too much competition – especially without consumer demand – can create a difficult environment that is not sustainable or profitable for businesses in the long term.

“Oligopolies, monopolies and cut-throat competition are two ends of a very long spectrum. And there’s a lot of room to maneuver along that spectrum,” Shaaban said, adding that public policy needs to reflect those market dynamics.

‘No optimal number’ of competitors

However, being big is not necessarily bad, and also allows companies to dominate markets, said Vas Bednar, managing director of the Canadian SHIELD Institute, a public policy think-tank that focuses on sovereignty, and co-author of The big problem: How companies corner markets and hurt Canadians.

“Strong markets are more than just counting the number of competitors… there is no optimal number,” Bednar said.

“But if we ignore the realities of how companies are competing or how they’re structured, how they’ve evolved over time, then the conversation about things like barriers to entry or bringing a new entrant into the market is really difficult.”

Some companies — especially those that position themselves as “do everything” companies, with access to different sectors and supply chains — can grow because they use one branch of their business to financially offset other parts of it, Bednar said.

That could help them “eliminate competitors, either drive them out of the market, or reduce their value and then significantly undervalue them with the goal of acquiring them, because as a company, they’re not one thing,” he said.

They may also use a strategy called “vertical integration” – in which they control multiple parts of their supply chain, rather than outsourcing that work to another firm.

What security is in place?

Several Canadian companies were directly or indirectly affected by the AWS outage on Monday, including wealth management platform Wealthsimple, which said It was having technical problemsAnd the Toronto Blue Jays, what some fans said I was having trouble Purchasing tickets after being disrupted by a Ticketmaster outage.

Jennifer Quaid, a full professor in the civil law section at the University of Ottawa’s Faculty of Law, said disruptions are inevitable and the question to ask is: “What measures are in place to ensure that when they do happen there are not dire or catastrophic consequences?”

Some sectors of the economy have been deemed too critical to failure, Quad said, which occurs when redundancies are built in those sectors: backup infrastructure that is not essential for everyday functioning but can operate if the primary infrastructure fails.

“For example, this happens in the nuclear industry. You can’t afford to lapse in safety,” he said.

In a report last year, the Canadian Radio-television and Telecommunications Commission said the 2022 Rogers outage could have been prevented if the company’s systems There is no shortage of some excessThe regulator said it has since made changes to address the root cause of the outage.

In the case of something like AWS, “you have to identify parts of the Internet or types of Internet usage that would be considered critical enough to require backup or some kind of sharing mechanism with other providers,” Quaid said.

When it comes to protecting Canadian consumers from vulnerabilities foreign owned infrastructure“We don’t have security for this,” Bednar said.

However, he added, “We are now more aware of that interdependence, how that interdependence has been weaponized, and we are more motivated to invest more in digital infrastructure at home.”