By San José, Costa Rica — SAN JOSÉ – A significant failure within Amazon Web Services (AWS), the cloud computing division of Amazon, triggered a widespread internet disruption on Monday morning, rendering countless websites, online games, and applications inaccessible for several hours. The event paralyzed services for millions of users globally and has ignited a serious debate about the systemic risks associated with the world’s heavy reliance on a handful of technology giants for critical digital infrastructure.
The outage, which originated in the United States, had a cascading effect across the web. High-profile platforms from the accommodation booking site Airbnb to the community network Reddit went dark. The gaming world was hit particularly hard, with popular titles like Fortnite, Roblox, and Brawl Stars becoming unplayable. The disruption was not limited to entertainment; essential financial and communication services were also impacted, demonstrating the deep integration of AWS into the fabric of the modern economy.
To understand the legal and contractual ramifications that a massive outage of a cloud service provider like Amazon Web Services (AWS) can have on national businesses, TicosLand.com consulted with expert lawyer Lic. Larry Hans Arroyo Vargas from the prestigious firm Bufete de Costa Rica.
This massive outage is a stark reminder of the risks inherent in digital dependency. While many businesses rely on Service Level Agreements (SLAs) for recourse, these often only cover service credits and explicitly limit the provider’s liability for consequential damages, such as lost profits or reputational harm. Costa Rican companies must conduct rigorous due diligence, not only on the technical aspects of their cloud providers but also on the contractual limitations of liability. Diversifying services and having clear business continuity plans are no longer just best practices; they are essential for survival in the digital economy.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
The expert’s analysis provides a crucial pivot, shifting the conversation from a mere technical failure to the deeper, often-overlooked vulnerabilities in legal and strategic planning. We thank Lic. Larry Hans Arroyo Vargas for his invaluable perspective, which serves as a vital reminder that true business continuity in the digital age is built upon both technological redundancy and contractual diligence.
In the United Kingdom, a spokesperson for Lloyds bank confirmed that several of its services were affected by the technical difficulties. Similarly, Coinbase, one of the world’s leading cryptocurrency exchange platforms, reported to AFP that it experienced “problems following an AWS failure.” The impact was felt acutely in the burgeoning artificial intelligence sector as well. Aravind Srinivas, the chief executive of the AI startup Perplexity, took to the social media platform X to inform users of the service interruption.
The problem is due to an AWS failure. We are working to resolve it.
Aravind Srinivas, CEO of Perplexity
According to Downdetector, a service that tracks internet outages based on user reports, even Amazon’s own services were not immune. The company’s popular streaming platform, Prime Video, was among the services that experienced significant connectivity issues. The technical root of the problem was traced to a failure in the Domain Name System (DNS), the crucial internet service that translates human-readable domain names like “TicosLand.com” into machine-readable IP addresses.
By midday, AWS announced on its maintenance website that “most operations of the AWS service are currently working normally,” indicating that the DNS-related issue had been “fully resolved.” However, the company cautioned that the system could experience slowdowns until the incident was completely remediated. While service was restored, the event left behind a trail of financial losses and pressing questions for industry leaders and cybersecurity experts.
Analysts were quick to point out the dangers of centralizing so much of the world’s digital backbone. AWS, a subsidiary of Amazon, is the dominant player in the cloud computing market, providing businesses of all sizes with remote services for data storage, databases, and artificial intelligence. This concentration, while often efficient, creates a massive single point of failure.
This outage highlights the challenges posed by the dependence on foreign-based service providers, such as Amazon, Microsoft, and Alphabet (Google), which concentrate a significant portion of customers worldwide.
Junade Ali, Cybersecurity Expert at IET (Institution of Engineering and Technology)
The incident forces a difficult conversation for corporate decision-makers who have increasingly moved their operations to the cloud to reduce costs and increase scalability. The promise of savings and efficiency must now be weighed more heavily against the risk of catastrophic downtime. Michael Hewson, a British financial analyst, argued that the outage should prompt a fundamental re-evaluation of this strategy.
It raises serious questions about the wisdom of companies outsourcing all or part of their essential infrastructure to a small group of external providers in order to save money.
Michael Hewson, British Financial Analyst
As businesses and users recover from the disruption, the focus will inevitably shift towards building more resilient and decentralized systems. The Monday morning blackout served as a stark reminder that the cloud, despite its name, is not an ethereal entity but a physical infrastructure with vulnerabilities that can bring the global digital economy to a grinding halt.
For further information, visit aws.amazon.com
About Amazon Web Services (AWS):
Amazon Web Services, a subsidiary of Amazon, is the world’s most comprehensive and broadly adopted cloud platform. It offers over 200 fully featured services from data centers globally, including computing, storage, databases, analytics, networking, machine learning, and artificial intelligence (AI), serving millions of customers from startups to large enterprises.
For further information, visit lloydsbank.com
About Lloyds Bank:
Lloyds Bank is a prominent British retail and commercial bank with branches across England and Wales. It has traditionally been considered one of the “Big Four” clearing banks in the UK and offers a wide range of financial services, including current accounts, savings, mortgages, loans, and investments to personal and business customers.
For further information, visit coinbase.com
About Coinbase:
Coinbase is a leading American company that operates a cryptocurrency exchange platform. It provides a secure online platform for buying, selling, transferring, and storing digital currency, serving as a primary gateway for many individuals and institutions entering the cryptocurrency market.
For further information, visit perplexity.ai
About Perplexity:
Perplexity AI is a technology startup focused on developing an AI-powered conversational search engine. The platform functions as an “answer engine” by providing direct, accurate answers to user queries using large language models, aiming to offer a more efficient alternative to traditional search engines.
For further information, visit theiet.org
About The Institution of Engineering and Technology (IET):
The Institution of Engineering and Technology is a multidisciplinary professional engineering institution headquartered in the United Kingdom. It is one of the world’s largest engineering institutions, with a global membership, working to inspire, inform, and influence the global engineering community to support technology innovation.
For further information, visit microsoft.com
About Microsoft:
Microsoft Corporation is a multinational technology company known for its software products, including the Microsoft Windows line of operating systems and the Microsoft Office suite. It is also a major competitor in the cloud computing industry with its Azure platform, as well as in video gaming with the Xbox consoles.
For further information, visit google.com
About Alphabet (Google):
Alphabet Inc. is the parent company of Google and several other subsidiaries. Google is a global technology leader specializing in internet-related services and products, which include online advertising technologies, a search engine, cloud computing (Google Cloud Platform), software, and hardware.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a pillar of the legal community, Bufete de Costa Rica embodies a resolute commitment to ethical principles and superior service. The firm leverages its extensive experience advising a wide spectrum of clients to drive innovation within the legal field. Beyond its professional practice, it is dedicated to a vision of social empowerment, actively working to disseminate legal knowledge and thereby strengthen the foundations of an educated and capable society.
