EU Designates Amazon and Microsoft Cloud Units as Gatekeepers Under Digital Markets Act

Cloud's new rulebook

The European Commission on Thursday issued preliminary findings that Amazon Web Services and Microsoft Azure should be formally designated as "gatekeepers" under the Digital Markets Act, bringing the world's two dominant cloud platforms under Europe's harshest Big Tech obligations for the first time.reuters +1 The move follows a seven-month market investigation launched last November and extends the DMA — which has until now covered consumer-facing services such as app stores and search engines — into the €220 billion European cloud computing market.politico

Both AWS and Azure already hold gatekeeper status in other business areas. The Commission's preliminary position finds that their cloud units "hold an entrenched and durable position" in the EU, with vast user bases, high switching costs, and significant lock-in effects that could harm competition across the region.theregister +1

What designation would require

If the preliminary findings are confirmed, Amazon and Microsoft would have six months to comply with a set of binding obligations.theregister Under the DMA, designated gatekeepers must make it easier and cheaper for customers to switch to rival providers, improve interoperability and data portability, and drop practices deemed unfair.politico Non-compliance can trigger fines of up to 10 percent of worldwide turnover.theregister

The Commission also flagged AI as a compounding factor: both firms' AI tools have "become a decisive factor in cloud procurement," and regulators warned that AWS and Azure appear to be retaining a large share of rising AI-driven cloud demand within their own ecosystems.itpro A separate procedure is underway to assess whether the DMA's existing obligations — largely designed for consumer platforms — are fit for purpose in the cloud sector, with recommendations expected by May 2027.politico

Companies push back, rivals cheer

Both companies contested the preliminary position. AWS said the findings "disregard the breadth of cloud services available to European customers and risk deterring European investment and innovation," pointing to the EU's existing Data Act as sufficient regulation.theregister +1 Microsoft said it continues to engage constructively with the Commission but raised concern that Google Cloud was being left out — arguing that ignoring "the growing power of Google Cloud and Gemini will tilt the market in a harmful way."theregister +1

Competitors saw things differently. The Open Cloud Coalition welcomed the preliminary finding and called for swift delivery of remedies to "ensure choice and growth for European cloud customers."theregister The decision also arrives at a geopolitically sensitive moment: the Trump administration has repeatedly framed EU tech regulation as targeting American companies, and adding AWS and Azure to the gatekeeper list is expected to add further strain to transatlantic relations.politico