AWS and Azure are the largest and second largest cloud computing services in the EU respectively.

The EU wants to designate Amazon and Microsoft’s cloud services as gatekeepers under the bloc’s strict competition regulations.

Amazon Web Services (AWS) and Microsoft’s Azure are the largest and second largest cloud computing services in the EU respectively, but they do not meet the Digital Markets Act’s (DMA) thresholds for size, user number and market position to be called gatekeepers.

The DMA aims to regulate players in various digital markets by setting responsibilities and banning unfair practices – and the designation is only given to platforms that provide an important gateway between businesses and consumers.

The Commission launched an investigation into the platforms nonetheless last November, arguing that the companies’ cloud services showed “very strong [market] positions”.

In its preliminary conclusion today (25 June), it noted that the two companies already hold the gatekeeper title in other services; Amazon, for its online marketplace and ads, and Microsoft for its Windows operating system and social network platform LinkedIn.

It highlighted their “significant” turnover and investments that “seem to have significantly outpaced” its competitors.

“They both have vast and entrenched user bases and appear to benefit from lock-in effects and high switching costs, in addition to a large ecosystem,” the Commission said.

Meanwhile, AWS and Azure also service a “large proportion” of businesses seeking cloud services due to the surging demand for AI, while holding an “entrenched and durable position in the EU cloud computing sector”, the EU added.

Amazon and Microsoft can refute these claims and respond to the bloc if they want to.

The EU has made concerted efforts in recent years to regulate Big Tech and explore a way out of its heavy reliance on foreign digital infrastructure (nearly all of its DMA designated gatekeepers across sectors are based in the US, except for TikTok-owner ByteDance).

“In Europe, we are increasingly reliant on cloud computing services. From consumers to business large and small, to public administrations,” said EU executive vice-president for clean, just and competitive transition Teresa Ribera.

“These services will only continue to grow in importance, which is why it essential that we ensure a well-functioning and competitive market, and a level playing field for all cloud service providers.”

It launched a similar investigation into Apple Ads and Maps late last year, but concluded in February that the company’s particular services do not constitute a designation under DMA.

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