European Union antitrust regulators have announced preliminary findings proposing that Amazon Web Services and Microsoft Azure be designated as “gatekeepers” under Digital Markets Act, a move that would bring the cloud computing businesses of Amazon and Microsoft under a stricter regulatory framework. If confirmed, the designation would subject both companies to a series of obligations and restrictions designed to promote fair competition, prevent anti competitive practices, and improve interoperability within Europe’s rapidly expanding cloud services market. The proposal marks a significant expansion of Digital Markets Act, which has so far focused on major digital platforms such as search engines, social media platforms, and app stores. Extending the rules to cloud infrastructure reflects the increasing importance of cloud computing as a foundation for artificial intelligence, enterprise applications, and digital transformation across Europe. The preliminary findings come after a seven month investigation conducted by European Commission into the cloud services market and the growing influence of the industry’s largest providers.
According to European Commission, cloud computing has become a critical component of Europe’s economy, with more than half of businesses across European Union relying on cloud services to support daily operations. European Commission Executive Vice President for Tech Sovereignty, Security and Democracy, Henna Virkkunen, said cloud services have become a prerequisite for artificial intelligence development and have attracted record levels of investment in public cloud infrastructure throughout the region. She stated that because of their central role in Europe’s digital future, cloud services should operate within fair, open, and competitive markets that encourage trust while supporting Europe’s technological sovereignty. Under Digital Markets Act, companies designated as gatekeepers must comply with several obligations intended to reduce market dominance. These include limits on self preference practices, improved interoperability between competing services, and stronger requirements for data portability that make it easier for customers to move workloads between cloud providers. European Commission cited Amazon Web Services and Microsoft Azure’s significant financial scale, operational capacity, extensive investments, large user bases, and high customer switching costs as key reasons supporting the proposed designation. Regulators also pointed to the companies’ artificial intelligence capabilities and strategic partnerships, describing them as important factors influencing cloud procurement decisions across Europe.
Amazon has rejected the assessment, arguing that it overlooks the broad range of cloud service providers already available to European customers. An Amazon Web Services spokesperson stated that European Union already regulates cloud computing through Data Act and warned that introducing another layer of overlapping regulation under Digital Markets Act could weaken European competitiveness while discouraging innovation and investment in advanced information technology. Microsoft also expressed concerns regarding the preliminary findings, but focused its response on the competitive landscape. A company spokesperson argued that regulators were overlooking the growing influence of Google Cloud and its Gemini artificial intelligence platform, suggesting that excluding Google from the same regulatory treatment could create an imbalance within the cloud services market. European Commission, however, maintained that Amazon Web Services and Microsoft Azure currently possess stronger market positions due to their scale, customer reach, infrastructure investments, and entrenched presence among enterprise users, making them appropriate candidates for gatekeeper designation under existing Digital Markets Act criteria.
The proposal remains at the preliminary stage, and both Amazon and Microsoft have the opportunity to respond to European Commission’s findings before a final decision is made in the coming months. During this review process, both companies can submit evidence and legal arguments challenging the proposed designation. The outcome of the investigation could have a significant impact on Europe’s cloud computing market by expanding Digital Markets Act beyond traditional digital platforms into infrastructure services that increasingly support artificial intelligence, enterprise software, and digital public services. European Commission’s latest action highlights the growing regulatory focus on cloud computing as an essential part of Europe’s digital economy while continuing its broader effort to address competition concerns involving large technology companies operating within European Union.
Follow the SPIN IDG WhatsApp Channel for updates across the Smart Pakistan Insights Network covering all of Pakistan’s technology ecosystem.
