The European Commission has issued preliminary findings that Amazon Web Services (AWS) and Microsoft Azure should be designated as gatekeepers under the Digital Markets Act (DMA), a move that would impose strict obligations aimed at curbing market power in cloud computing. This marks the first time EU regulators have targeted cloud infrastructure services under the landmark tech rules, which previously applied only to core platform services like search, social media, and app stores.
Scope of Designation and Obligations
If finalized, the designation would subject AWS and Microsoft Azure to a set of obligations and bans, including limits on self-preferencing, requirements to ensure interoperability, and mandates for data portability. The DMA aims to foster fair and open markets in the digital sector, and extending it to cloud services is seen as a significant expansion into a critical area for artificial intelligence development.
EU tech chief Henna Virkkunen stated, "Cloud services have become a cornerstone of Europe’s economy — and a prerequisite for AI — with over half of EU businesses now relying on them, combined with record investment in public cloud infrastructure. Given their central role in Europe's digital future, these services must operate in fair, open and competitive markets that foster trust and secure Europe’s tech sovereignty."
Investigation and Preliminary Findings
The preliminary findings follow a seven-month-long investigation. The European Commission singled out AWS and Microsoft Azure based on several factors: their significant turnover, larger operational capacity and investments compared to rivals, vast and entrenched user bases, lock-in effects, and high switching costs for customers. The regulator also cited the two services' AI tools and partnerships as a decisive factor in cloud procurement decisions.
Industry Reactions
Amazon and Microsoft have pushed back against the preliminary findings. An AWS spokesperson said, "The EU already has comprehensive cloud regulation through the Data Act, and adding another heavy layer of overlapping regulation under the DMA undermines European competitiveness and access to cutting-edge information technology." Amazon also argued that the assessment disregards the breadth of cloud services available to European customers and risks deterring European investment and innovation.
Microsoft, meanwhile, pointed to the growing power of its rival Google. A Microsoft spokesperson stated, "We remain concerned that ignoring the growing power of Google Cloud and Gemini will tilt the market in a harmful way."
Next Steps
Amazon and Microsoft now have the opportunity to respond to the Commission's preliminary findings before a final decision is issued in the coming months. The outcome could set a precedent for how cloud services are regulated in Europe and potentially influence global tech regulation.
