Amazon’s Sloppy Management of Vital Cloud Services Proves Need for Strict Regulation

Recent Deal to Host NASDAQ Highlights Essential Nature of AWS Services

WASHINGTON— Yesterday, Amazon Web Services (AWS) suffered a massive outage, causing entire warehouses to shut down and delivery drivers to be sent home as robots sat motionless and logistics software stopped functioning.

The outage comes a week after NASDAQ, the second-largest stock exchange in the world, announced it is moving its North American markets to AWS’s cloud.

In response, Brian Callaci, chief economist at the Open Markets Institute, issued the following statement:

“The message we’ve been sending about the need for enhanced regulation of AWS was made crystal clear yesterday: If AWS hiccups, the rest of the economy can suffer a stroke.

“The effects of AWS’s outage extended far beyond Amazon’s own business to the huge swaths of the economy that depend on AWS for internet infrastructure. Streaming services like Netflix and Disney+ went dark, visitors to Walt Disney theme parks could not check in online, and traders using Robinhood and Coinbase could not execute trades.

“Just two weeks ago, Open Markets sent a joint letter with labor and justice organizations to the Financial Stability Oversight Council (FSOC) asking them to designate AWS as a Systemically Important Financial Market Utility (SIFMU), which would bring AWS under the supervision of the Federal Reserve. The SIFMU designation would hold AWS to appropriate standards to protect the public from financial instability—such as requiring the corporation to prioritize the stability and safety of the financial system over risk-taking and short-term private profit.

“The recent outage and the NASDAQ announcement prove the urgency of our point. Allowing financial institutions to outsource such essential functions to unregulated cloud providers risks massive disruption to the financial system and the public that depends on it. The time for regulators to act is now.”

###