European Commission probes whether Amazon and Microsoft wield outsized control under Digital Markets Act
The European Commission has launched investigations into Amazon and Microsoft's cloud services, and plans to review if legislation introduced in 2022 is being applied effectively to the cloud market.
The executive branch of the EU will consider whether Amazon and Microsoft should be named as "gatekeepers" for their cloud computing services under the Digital Markets Act, a designation that creates special obligations for the two hyperscalers, and fines of up to 10 percent of worldwide turnover if they do not meet them.
The EC is determining whether the two cloud giants act as important gateways between businesses and consumers, even though they do not automatically qualify under the DMA's quantitative thresholds.
If they are found to be gatekeepers under the DMA, they will have to allow third parties to interoperate with their own services and allow users to access the data they generate on the platform, for example. They will also be prohibited from treating their own services and products more favorably in rankings than those from third parties.
A separate investigation is set to assess whether the DMA can tackle cloud market behavior that may limit competitiveness and fairness.
Henna Virkkunen, EC executive vice president for tech sovereignty, security and democracy, said:
"Cloud computing services power Europe's digital future – enabling AI development and driving innovation. Such services should be offered in a fair, open and competitive environment that fosters trust and secures Europe's tech sovereignty. With today's market investigations, we want to assess whether Amazon and Microsoft with their cloud services Amazon Web Services and Microsoft Azure qualify as gatekeepers – and if yes, how to ensure an effective application of the Digital Markets Act in cloud computing services."
A Microsoft spokesperson said: "The cloud sector in Europe is innovative, highly competitive and an accelerator for growth across the economy. We stand ready to contribute to the European Commission's market inquiry."
A spokesperson at AWS sent a statement: "We're confident that when the European Commission considers the facts, it will recognise what we all see - the cloud computing sector is extremely dynamic, with companies enjoying lots of choice, unprecedented innovation opportunity, and low costs, and that designating cloud providers as gatekeepers isn't worth the risks of stifling invention or raising costs for European companies."
A UK investigation into cloud markets found that "high levels of market concentration and barriers to entry and expansion have enabled each of the two largest providers, AWS and Microsoft, to hold significant unilateral market power in these markets."
The FTC is also probing the health of the cloud market stateside.
Some US politicians see EU tech laws as trade barriers to entry, or effectively taxation on American tech giants, even though the same rules apply to companies based in the EU. For example, President Trump's team considered imposing sanctions on the European Union or its member state officials responsible for the Digital Services Act, which is separate from the DMA. ®