AWS Outage Compensation: What Businesses Can Expect After Widespread Disruption

A major Amazon Web Services (AWS) outage has disrupted operations for over 1,000 companies. The incident began on October 20, 2025, causing widespread service failures. Businesses and services across the globe felt the impact. Recovery efforts are progressing slowly, with effects potentially lasting for days.

According to the Associated Press, the outage stemmed from a significant DNS issue. Amazon has since reported that the underlying problem has been “fully mitigated.” However, some customers continue to experience increased error rates with various AWS services.

AWS Outage Compensation: A Complex Challenge for Businesses

Legal experts express doubt about full financial compensation for affected companies. Ryan Gracey, a technology lawyer, explained the situation to Techradar. He noted that AWS clients operate under standardized service level agreements. These agreements outline uptime guarantees and corrective actions for service interruptions.

Service credits for downtime are typically provided by AWS. However, these credits are often insignificant. They rarely cover actual business losses like lost revenue or reputational damage. Ultimately, customers are left with limited recourse for their significant losses.

Broader Impacts and Customer Fallout

The ripple effects of the outage are severe for end-users. Henna Elahi, a Senior Associate at Grosvenor Law, highlighted the impact on UK banks like Lloyds. Failed payments and transfers can cause users to breach contracts or fail to complete critical purchases. This creates a chain reaction of financial and legal complications.

Such service failures often lead to direct customer complaints. Businesses impacted by the AWS outage may then face attempts from their own customers to recover losses. The reputational damage for companies caught in the middle could be long-lasting.

The path to compensation for the widespread AWS outage appears limited for most businesses, leaving many to absorb the financial and reputational costs of this major service failure.

Thought you’d like to know

What compensation does AWS typically offer for outages?

AWS typically provides service credits as outlined in its service level agreements. These credits are calculated based on the duration of the downtime. They are often a small fraction of the customer’s monthly bill and do not cover consequential losses.

Can businesses sue AWS for losses caused by the outage?

Legal experts indicate this is highly challenging. AWS service agreements strongly limit liability for service interruptions. Pursuing claims outside the standard agreement terms would be difficult and costly for most companies.

How many companies were affected by this AWS outage?

The outage impacted more than 1,000 enterprises globally. The disruption affected a wide range of services from banking to education platforms. Recovery has been a slow process for many.

What was the main cause of the AWS outage?

Amazon identified an “underlying DNS issue” as the root cause. The company stated this issue has been fully mitigated. Some customers still report lingering problems with service operations.

How long did the AWS outage last?

The full duration is still being assessed as some services recover. Initial disruptions began on October 20, 2025. Amazon has warned that some effects may persist for days.