Conflict of interest concerns raised over CMA's use of AWS UK public sector discount scheme

The CMA’s use of AWS

The CMA is specifically benefiting from a three-year preferential pricing-focused Memorandum of Understanding (MoU) that AWS signed with the UK government in October 2020, known as the One Government Value Agreement (OGVA).

The OGVA officially expired in October 2023, with the government’s procurement arm – the Crown Commercial Service (CCS) – confirming to Computer Weekly late last month that it was hoping to renew the agreement in due course.

According to a redacted document shared with Computer Weekly by a source with close working knowledge of government cloud procurement contracts, the OGVA offers committed spend discounts so buyers are able to access bigger savings on AWS services if they pay upfront for them.

The baseline level of discount available to public sector bodies that use OGVA is 18%, the document confirmed, with an additional discount of 2% offered to buyers that pay for their services upfront and in full.

Tussell’s data shows the CMA used the preferential pricing terms of the OGVA MoU to take out a 36-month contract with AWS valued at £191,303. This contract is set to expire in April 2024, which is 12 months before the authority’s anti-trust investigation into AWS and Microsoft is due to end.

Owen Sayers, a data protection expert and enterprise security architect at Secon Solutions, said the fact the CMA is actively benefiting from an AWS preferential pricing scheme while probing how the company’s pricing tactics affect competition in the market does risk tainting the wider investigation.

“The CMA find themselves in an invidious position – only they are legally equipped and able to perform the analysis, but as a possible beneficiary of [the discounted pricing] they need to be sure their investigation does not become, and cannot be accused of being, tainted,” said Sayers. “The onus is now on the CMA to come up with some mechanism to maintain the integrity of the investigation.”

One way of doing this would be to appoint an independent third party of “sufficient public standing” to hold an “overseer function” so any conflict of interest claims can be quickly put to bed, he added. 

“Given the necessary constraints that exist on full transparency for their investigation, that is probably the best way for them to progress this if they cannot demonstrate that the inference of conflict of interest is wholly groundless,” Sayers added.

Past calls for a CMA intervention into the UK cloud market  

This is not the first time the CMA’s AWS usage has attracted attention.

Computer Weekly is aware that several years ago the CMA was called upon by UK tech market watchers to investigate the impact the government’s public cloud-first policy was having on competition within the UK cloud sector.

Government sources confirmed that former CMA CEO Andrea Coscelli received “correspondence” between May and June 2020 on this matter, but Computer Weekly understands no action was taken due to time and resources constraints relating to the onset of the Covid-19 coronavirus pandemic.

One month after this correspondence was exchanged, a listing appeared on the UK government’s Contract Finder portal in July 2020 confirming the CMA had embarked on a £72,000, 12-month contract with AWS.

“We were incensed to learn then that the CMA was using AWS,” one of the parties involved in that correspondence told Computer Weekly on condition of anonymity.

A letter was also written to former Cabinet Office minister Lord Agnew in July 2021, co-signed by senior representatives from seven different UK-based cloud providers, about the competitive implications of the AWS OGVA deal.

“The US giant has secured three-year deals with its existing central government customers with total contract values in excess of £330m, with total annual committed values of over £73m,” the letter, seen by Computer Weekly, stated.

“The overseas giants are deliberately locking themselves into these large government contracts, knowing that once the downpayment is made, government will be very reluctant to shift suppliers. AWS and the other large providers effectively deliberately establish high barriers to entry, undercutting smaller domestic players in the first instance, and then lock in their positions down the line.”

Computer Weekly understands the letter drew no response from Lord Agnew at the time.

Nicky Stewart, former head of ICT at the Cabinet Office, said the UK cloud market has suffered for years as a result of AWS and Microsoft’s preferential pricing strategies going unchallenged, but that has to change.

“The anti-competitive nature of the public sector cloud infrastructure market has been suppurating in the UK’s own cloud industry for years, and the OGVA was the final straw. It’s high time for the CMA to lance the boil, even if it causes itself some inconvenience in the process,” she added.