AWS would spin out from Amazon if "forced" by US regulators

AWS CEO Andy Jassy doesn't see the customer benefits of splitting Amazon's cloud business from the main company

AWS CEO Andy Jassy has said that the cloud giant would spin off from parent company Amazon if regulators forced it too.

During a chat with Recode editor-at-large Kara Swisher at the 2019 Code Conference, Jassy responded to a question about a recent Washington Post report on an agreement between two federal agencies that put Amazon under the jurisdiction of the Federal Trade Commission.

The report follows calls for the breakup of large technology companies from Senator Elizabeth Warren, a Democratic presidential candidate who has Facebook and Google in her sights.

Amazon and AWS often come up in discussions about tech breakups and Jassy said that he didn't see the benefits of it, but the company would follow regulatory action if it seeks to split the world's largest cloud provider from its parent.

"I think that when you're able to build multiple customer experience in different business segments that people really respond to, your business is going to get larger," he said. "I think as your business gets larger, there's going to be more scrutiny. We expect it and you have to run the business to be comfortable with that, which is the way we've tried to do it.

"I would never say never about anything, but I just don't see it. Typically, when companies spin off subsidiaries, it's either because they want to get that company off the financial statements or they just can't afford to fund the business the way it used to be funded. Neither of those is the case so I just don't see it."

Jassy said that spinning off the business wouldn't be in its customer's interests because of the extra admin and financial infrastructure it would have to add and deal with would be a "distraction" and potentially disrupt the company's ability to deploy new services. But, he added, that they wouldn't have much choice if they were forced.

"I can't speak to what the government is thinking, or will do, but at the end of the day, we operate in the United States and we will follow the United States laws," he said. "If we were forced to do it, I guess we would have to."

Having been with Amazon for more than 20 years, Jassy has insight into how both AWS and Amazon interact, along with AWS' position in the cloud an IT market, which is significant given roughly half of Amazon's latest reported operating income came from AWS. 

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