Amazon’s CEO Andy Jassy wore a broad smile while meeting Keir Starmer in the gardens of Downing Street to announce a £40bn investment in the UK this past June. Starmer shared his enthusiasm, stating, “equally passionate”. He remarked, “This transaction demonstrates that our transformation strategy to attract investment, stimulate growth, and enhance people’s financial well-being is succeeding.”
However, just four months later, the company faced a massive global outage on Monday that halted thousands of businesses and underscored its reliance on Amazon Web Services (AWS), the cloud computing platform utilized by the British government.
Data gathered for the Guardian indicates that the UK government is increasingly dependent on the services of U.S. tech giants. These companies have come under fire from trade unions and politicians for their working conditions in logistics and online retail.
Since 2016, AWS has secured 189 contracts with the UK government valued at £1.7bn and has billed approximately £1.4bn during this timeframe, according to data from public procurement intelligence firm Tassel.
The research group reported: “Currently, 35 public sector authorities utilize AWS services across 41 contracts totaling £1.1bn. The primary ministries involved include the Home Office, DWP, HMRC, the Ministry of Justice, Cabinet Office, and Defra.
Tim Wright, a technology partner at law firm Floodgate, noted that the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) have consistently warned about the risks associated with concentrating cloud services for regulated enterprises.
“Recent efforts by the Treasury, the PRA, and the FCA to impose direct oversight on ‘significant third parties’ aim to mitigate the risk of outages like those faced by AWS,” he said. “However, until we see substantial diversification and the establishment of sovereign clouds, the UK government’s approach contradicts the resilience principles that regulators advocate for.”
The House of Commons Treasury Committee has reached out to Chancellor of the Exchequer Lucy Rigby to inquire why Amazon wasn’t classified as a “significant third party” within the UK financial services sector, a designation that would have subjected the tech giant to regulatory scrutiny.
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Committee Chair Meg Hillier noted that Amazon recently informed the committee that its financial services clients rely on AWS for “resilience” and that AWS offers “layers of protection.”
This week’s outage impacted over 2,000 businesses around the globe, leading to 8.1 million reports of issues, with 1.9 million in the U.S., 1 million in the UK, and 418,000 in Australia, according to internet outage tracker Downdetector.
Only HMRC confirmed it was affected by the outage, stating customers were “experiencing difficulties accessing our online services” and recommended they call back later due to busy phone lines.
While many websites restored their services after a few hours, some continued to experience problems throughout the day. By Monday evening, Amazon announced that all cloud services had “returned to normal operations.”
Trade unions have long questioned whether Amazon should be excluded from government contracts because of its reputation for subpar working conditions in its large warehouses.
Andy Prendergast, national secretary of the GMB union, stated: “Amazon has a dismal record regarding fair treatment of workers. Shocking conditions in their warehouses have resulted in emergency ambulance calls, with employees claiming they are treated like robots, forced to work until exhaustion, all while being compensated with poverty wages until they strike for six months.”
“In this context, wasting nearly £2 billion of public funds is deplorable.”
AWS has not provided a comment. A spokesperson from Amazon’s fulfillment centers stated that the “vast majority” of ambulance calls at their facilities are not “work-related.”
Source: www.theguardian.com
