Amazon Just Gave Antitrust Regulators More Fodder

Last week, Amazon (NASDAQ:AMZN) Web Services (AWS) hosted its re:Invent 2019 conference, with AWS CEO Andy Jassy announcing a slew of new services spanning artificial intelligence (AI), quantum computing, cybersecurity, data storage, and more. In doing so, AWS is encroaching on some of its existing partners that offer similar services, becoming a competitor to many of the smaller companies.

Just wanted to thank everybody for being with us this week at #awsreinvent...it's our favorite week of the year, inspiring for all of us on the #AWS team to be with so many of our customers, a great learning week for us, and energizing. Hope you enjoyed, too.
— Andy Jassy (@ajassy) December 7, 2019

The new service announcements come as regulators at the Federal Trade Commission have reportedly started probing the dominant cloud infrastructure provider's practices for potential antitrust violations. AWS may have just given regulators more fodder in the ongoing investigation, which initially focused on the tech giant's core e-commerce business but has now expanded.

AWS now offers 175 different services

William Blair analyst Jason Ader recently sent out a research note to investors, according to Business Insider, highlighting how AWS' growing portfolio of cloud-computing services risks alienating partners. The company clearly wants to become a one-stop shop for all cloud infrastructure.

For example, AWS announced general availability of AWS Outposts at the event, which entails Amazon installing its own fully managed infrastructure and related services in third-party data centers. AWS Outposts was initially announced in 2018, and the offering is finally ready for broader deployment.

Over the past two years, AWS has nearly doubled the total number of services it offers -- from 100 to 175 -- with 28 new services being introduced at the event alone. Other product announcements from the conference include Amazon Detective, a service designed to enable efficient security investigations; and CodeGuru, which leverages machine learning and AI to automate code reviews for software developers.

"Many of the attending vendors grumbled about their love-hate relationship with a company that simultaneously serves as their technological or go-to-market partner and their primary competitor," Ader wrote.

There is a long history of companies getting punished by investors when AWS launches new services. Shares of Tableau Software (acquired by salesforce.com earlier this year) took a hit in 2015 when AWS introduced QuickSight, a competing analytics visualization tool. More recently, MongoDB investors panicked when Amazon announced DocumentDB, a document database service that is compatible with MongoDB's competing service.

The analyst says that AWS is on its way to becoming the "enterprise infrastructure Goliath." However, that could also attract the ire of regulators as antitrust scrutiny of large tech companies intensifies. AWS is already the largest cloud infrastructure provider by far, and its market power only continues to grow.

This article originally appeared in the Motley Fool.

Evan Niu, CFA owns shares of Amazon and Salesforce.com. The Motley Fool owns shares of and recommends Amazon, MongoDB, and Salesforce.com. The Motley Fool has a disclosure policy.