This designation under the Digital Markets Act would introduce a range of requirements and prohibitions for the world’s largest cloud service providers, Amazon Web Services and Microsoft Azure. This includes restrictions on self-preferencing, as well as mandates to ensure interoperability and facilitate data portability.
Up to this point, EU regulators have focused on core platform services like search, social media, and app stores to rein in major tech companies. Expanding the DMA to encompass cloud infrastructure would signify a substantial move into a sector considered vital for AI development.
These preliminary findings come after a thorough investigation lasting seven months.
”Cloud services have evolved into a fundamental part of Europe’s economy – and are essential for AI – with over half of EU businesses currently relying on them, alongside record investments in public cloud infrastructure,” stated EU tech chief Henna Virkkunen.
”Given their pivotal role in Europe’s digital future, these services must function within fair, open, and competitive markets that foster trust and secure Europe’s technological sovereignty.”
Amazon responded by asserting that the assessment overlooks the variety of cloud services offered to European customers and could deter investment and innovation in Europe.
“The EU already has comprehensive cloud regulation through the Data Act, and introducing another layer of overlapping regulation via the DMA could undermine European competitiveness and access to state-of-the-art information technology,” an AWS spokesperson commented.
Microsoft highlighted the increasing influence of its competitor Google.
“We are concerned that neglecting the escalating power of Google Cloud and Gemini will adversely affect the market,” a Microsoft spokesperson remarked.
The Commission emphasized AWS and Microsoft Azure’s substantial revenues, greater operational capacity, and investments compared to their rivals, alongside their vast and established user bases, as well as the lock-in effects and high switching costs associated with their services.
Additionally, the EU competition authority referenced the two services’ AI capabilities and partnerships as significant factors in cloud procurement decisions.
Amazon and Microsoft now have the opportunity to respond to the Commission’s initial findings before the regulator reaches a final decision in the upcoming months.
