Amazon’s Underbelly 2.0: Our Government’s Faustian Bargain for Cloud Storage

This is Part II in a three-part series looking at the impacts of Amazon on government, surveillance and the democratic process. Read the first part here.

If you ask Americans who controls the majority of the cloud storage market share, they’ll likely call out Silicon Valley giants such as Facebook, Google and Microsoft. But in fact it is Amazon that reigns supreme in the cloud computing world.

As I discuss in my previous article for this series, Amazon actively sells surveillance technology to our government. Additionally, Amazon is unmatched in providing cloud storage to our government, gubernatorial organizations and local municipalities.

THE PATH TO POWER

Amazon has had a head start in the cloud market since its inception. To his credit, CEO Jeff Bezos realized about a decade ago that storing information on the Internet was cheaper and more efficient than storing information in traditional warehouses.

In 2006, Amazon formed its cloud computing branch of operations: Amazon Web Services, or AWS. After moving his information to cloud storage, Bezos began to expand and offer the space to other customers, namely, our government.

In 2010, the Obama administration started advocating for data storage in the cloud instead of brick-and-mortar data centers as a way to cut costs. Amazon was well-poised to provide the cloud space because of its substantial lead over competitors. Soon after the announcement, the company successfully snagged an opportunity to host Recovery.gov (www.recovery.gov), the agency website tasked with overseeing the use of stimulus money. Amazon’s business with the government, and its revenues, swelled.

“Since the announcement of Recovery.gov last March,” wrote Jeff Barr in a 2010 AWS News Blog, “Amazon has seen an accelerating adoption of the cloud by our Federal customers. These include Treasury.gov, the Federal Register 2.0 at the National Archives, the Supplemental Nutrition Assistance Program at USDA, the openEI.org project at DoE’s National Renewable Energy Lab, and the Jet Propulsion Laboratory at NASA.”

In 2013, Amazon began to form cozy deals with the government to use its cloud services. For one, it designated a secret region of the cloud especially for the CIA, earning a particularly lucrative contract from the agency worth $600 million dollars. Amazon now serves all 17 agencies of the intelligence community and provides commercial cloud capability across all classification levels: from unclassified to sensitive, secret and top secret.

A LINE BETWEEN COMPANY AND GOVERNMENT?

The company’s expansion into our government continues to this day. Now Amazon claims that over 2,000 government agencies are using AWS. Federal agencies such as the Department for Veterans Affairs, Centers for Medicare and Medicaid Services, NASA JPL and the U.S. Department of Defense are all clients. So are state and local institutions like the City of Chicago, the New York Public Library and the City of Los Angeles, all of whom depend on AWS for cloud computing services.

Securing its regional and local dominance, in January 2017 the company won a contract with U.S. Communities – a coalition of 90,000 local governments.

Today, AWS dominates no less than one-third of the worldwide cloud market. The IT research firm Gartner shows figures much higher, revealing that AWS’s quadrant showed it captured 83 percent of the cloud computing infrastructure market. Amazon controls such a dizzying market share because of the almost-guaranteed patronage of the U.S. government.

Continuing this trend, the online behemoth is currently in line to sign a staggering $10 billion contract with the Defense Department, known as Joint Enterprise Defense Infrastructure (JEDI). All bids were due in October 2018 and a decision is expected to be made this April. Other companies, from IBM to Oracle, have filed protests stating that the solicitation has been uncompetitive. The Government Accountability Office has since ruled against Oracle, allowing the process to move forward.

Amazon is also poised to serve as a portal for government purchases. Last year, a provision in a law passed by Congress required the General Services Administration (GSA) to set up “commercial e-commerce portals” for government purchase orders costing less than $25,000. This law became known as the “Amazon amendment” among critics.

Amazon didn’t earn this deal based on merit or business acumen. Instead, it used its political influence to change the outcome. As The Guardian revealed, in 2017, the head of Amazon Business’s public sector division, Anne Rung, privately advised on the GSA internet portal before the legislation was finalized and the company was chosen. Coincidentally, Rung was a former official in the Obama administration and she even ran the Office of Management and Budget’s Federal Procurement Policy office before joining Amazon.

Technically, there is nothing illegal about all this (there isn’t a law, yet, banning Washington’s revolving door). But the fact is Amazon is receiving advantages that other stakeholders, such as public interest groups, are not receiving.

Not only that, Amazon won another contract to become the chief supplier of goods like stationery and books to thousands of local governments and municipalities – a contract worth up to $5.5 billion.

It’s safe to say the government has become Amazon’s best customer, providing a steady stream of commerce that has been most lucrative for the company.

LACKING TRANSPARENCY, WHERE WE GO FROM HERE

Last year, AWS generated $1.4 billion in operating income for Amazon in Q1 alone. Later that year the figure increased by 46 percent to $6.7 billion.

Amazon’s lack of transparency about the expansion of its cloud storage is disappointing – but not surprising. Despite all the information we have on AWS and its quid pro quo relationship with our government, we still don’t know the sheer magnitude of its size and scope.

This because most of the information remains classified – including its CIA contract – due to Amazon’s refusal to reveal intricate details of its contracts and deals. Amazon often declines to comment about how much of its business is connected to the federal government. It’s only through FOIA requests that we are able to glean the partial information that is available.

Are we comfortable, as citizens, entrusting an untrustworthy, mega of mega-companies with the responsibility of storing information for our local and federal government? We were never given a choice in the matter, much less a say. Even more concerning, Amazon’s invasive surveillance technology, like Rekognition and Alexa, sends information to similar clouds to be processed and matched to a database.

The fact that Amazon has become the de facto government provider for both surveillance technology and cloud storage is a troubling development that signals a disturbing relationship between business and the officials who run our state. It was Benito Mussolini’s ghostwriter, Giovanni Gentile, who stated that “fascism should more appropriately be called corporatism, because it is a merger of state and corporate power.”

One need look no further than the future location of Amazon’s HQ2 – in Arlington County, Virginia, one mile south of the Pentagon to observe this encroaching merger. The symbolism of the symbiosis between state and corporate power couldn’t be clearer.

Our government, and the officials we elect, are addicted to the line of supporting free-market economics at all costs. But in reality, that government consistently prefers to cut deals with corporations that operate surreptitiously and clandestinely. We, as citizens, must remain vigilant or we may soon be faced with a monster too big to take down.

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