Cloudy Europe: After a relatively brief investigation, the European Commission reached a preliminary conclusion regarding Amazon's and Microsoft's cloud businesses. The executive body believes the two US companies should also be designated as "gatekeepers" for their cloud services, though both will have an opportunity to respond before a final decision is made.
Amazon Web Services and Microsoft Azure are now so important to Europe's digital economy that they may be required to comply with additional rules when doing business with customers in the EU. Otherwise, they could face hefty fines.
The Commission launched its investigation into the cloud market in 2025, gathering feedback from business customers, competitors, and other stakeholders. Amazon and Microsoft had already been designated as gatekeepers for other services and products. Despite not meeting the Digital Markets Act's quantitative thresholds for designation, the Commission said the companies have become key gateways connecting third-party businesses with customers across the EU.
Google, Amazon, and Microsoft have long been considered the "big three" of the global cloud computing industry. The Commission said AWS and Azure are now the largest and second-largest cloud service providers operating in the EU, respectively. Unlike Google, however, the two US companies have an outsized influence on the European cloud market.
Brussels is proposing the new gatekeeper designation because AWS and Azure generate significant revenue and could outpace competitors thanks to their operational scale and investment capacity. The Commission also argues that both companies have built vast customer ecosystems with strong lock-in effects, making it difficult for users to switch to competing cloud providers.
The European Commission is also considering the growing importance of AI tools and partnerships, which it now views as a "decisive" factor for customers signing new cloud contracts. AI-driven services are fueling demand for cloud infrastructure, while AWS and Azure are retaining a significant share of that new demand within their own ecosystems.
European authorities warn that being designated as a gatekeeper in a major market carries significant obligations. The Digital Markets Act requires gatekeepers to refrain from certain unfair practices, ensure data portability and interoperability, and prevent abusive conduct toward advertisers, publishers, and business users. Companies that fail to comply with the DMA could face fines of up to 10% of their global annual turnover.
According to Henna Virkkunen, the European Commission's Executive Vice-President for Tech Sovereignty, Security and Democracy, cloud services have become a cornerstone of Europe's economy and a prerequisite for AI development.
"Given their central role in Europe's digital future, these services must operate in fair, open and competitive markets that foster trust and secure Europe's tech sovereignty," Virkkunen said.
After receiving the Commission's preliminary findings, Amazon argued that the DMA's regulatory burden could undermine Europe's competitiveness. Microsoft, meanwhile, expressed concern that the Commission had overlooked the growing importance of Google Cloud and Google's Gemini AI services.
Either way, Amazon and Microsoft can now formally respond to the Commission's preliminary findings before a final decision is made. If the new gatekeeper designation is upheld, the two US companies will have six months to ensure their cloud businesses fully comply with the DMA's stricter rules.