The European Union appears set to extend its regulatory framework to cloud computing services, opening a new chapter in the battle to limit the power of tech giants. European antitrust authorities have tentatively assessed that cloud services from Amazon and Microsoft should be classified as “gatekeepers” under the Digital Markets Act(DMA).
If the decision is finalized, the world's two largest cloud providers, Amazon Web Services (AWS) and Microsoft Azure, will face a new set of obligations and restrictions aimed at creating more open and competitive digital markets.
What does the designation "gatekeeper" mean?
The DMA was designed to prevent big tech companies from exploiting their dominant position and creating barriers to competition. Until now, the European Commission's interventions have mainly focused on services such as search engines, social networks and online app stores.
See also: Brussels prepares largest DMA fine for Google
The potential inclusion of cloud computing in the scope of the law is a significant expansion of the European strategy. The designation as a gatekeeper could impose restrictions on self-promotion practices, require greater interoperability between services and facilitate the transfer of data and applications from one cloud provider to another.
In practice, businesses could gain greater freedom of choice, without being locked into a specific service ecosystem.
The cloud at the center of the Artificial Intelligence era
The European Commission considers that cloud services have now become a fundamental infrastructure of the digital economy. More than half of businesses in the European Union use public cloud services, while the development of artificial intelligence applications depends to a large extent on the availability of powerful computing resources.
The EU's chief technology officer, Henna Virkkunen, underlined that the cloud is a prerequisite for Europe's digital future and for ensuring its technological sovereignty.
Indeed, the rapid spread of generative AI has skyrocketed the demand for cloud infrastructure. Training large language models and running advanced AI services requires enormous computing power, which is mainly available from large international providers.
Why the EU is worried about the dominance of big players
The Commission's seven-month investigation concluded that AWS and Azure have an extremely strong market position. The two companies have significantly higher turnovers, huge investments in infrastructure, extensive customer bases and greater operational capacity than their competitors.
See also: EU broadcasters call for Apple TV and Siri to be regulated as gateways under DMA
Of particular concern is the phenomenon of “vendor lock-in.” Many businesses that move their data and applications to a cloud platform find that later moving them to another service is time-consuming, technically complex, and financially costly.
European authorities believe that these high switching costs may limit competition and further strengthen the dominance of the largest market players.
Amazon and Microsoft's reactions
Amazon argues that the EU assessment overlooks the wide variety of cloud options available to European businesses and warns that a new layer of overlapping regulation could negatively impact investment and innovation.
For its part, Microsoft argues that the European Commission is not taking sufficient account of the growing momentum of Google Cloud and the Gemini ecosystem in the artificial intelligence market.
See also: Europe seeks technological dominance: New package for Cloud and semiconductors
A decision that could change the future of cloud in Europe
The potential designation of AWS and Microsoft Azure as gatekeepers could reshape the balance of the European cloud computing market. The case does not only concern two technology giants, but also touches on broader issues of competition, innovation, digital independence and access to infrastructure that will support the next generation of artificial intelligence applications.
Amazon and Microsoft now have the opportunity to challenge the Commission's preliminary findings before a final decision is made in the coming months. The outcome of the proceedings is being awaited with great interest, as it could set a benchmark for how the cloud computing market will be regulated globally in the coming years.
