European Union antitrust regulators have proposed designating Amazon Web Services and Microsoft Azure as "gatekeepers" under the Digital Markets Act. This move would impose obligations to curb their market power and marks a significant expansion of the DMA into the AI sector.
This move by the EU could significantly reshape the competitive landscape of the cloud computing market, impacting major technology companies and potentially influencing the development and accessibility of AI technologies in Europe.
European Union antitrust regulators have proposed designating Amazon Web Services and Microsoft Azure as "gatekeepers" under the Digital Markets Act (DMA), a move that would subject the tech giants' cloud computing services to strict obligations aimed at curbing their market power. This designation represents a significant expansion of the DMA into the critical AI sector, as cloud services are increasingly seen as a prerequisite for artificial intelligence development.
The preliminary findings, which follow a seven-month investigation, cite the significant turnover, operational capacity, vast user bases, entrenched market positions, and high switching costs associated with AWS and Microsoft Azure. The EU competition enforcer also noted the role of their AI tools and partnerships in cloud procurement decisions.
EU tech chief Henna Virkkunen stated that cloud services are a cornerstone of Europe's economy and a prerequisite for AI, with over half of EU businesses relying on them. She emphasized the need for fair, open, and competitive markets to foster trust and secure Europe's tech sovereignty.
Amazon, however, argued that the assessment disregards the breadth of available cloud services and risks deterring European investment and innovation, suggesting that existing regulation through the Data Act is sufficient. Microsoft, meanwhile, expressed concern that overlooking the growing power of Google Cloud and Gemini could unfairly tilt the market.
Amazon and Microsoft now have the opportunity to counter the Commission's preliminary findings before a final decision is issued in the coming months.