European Union regulators are intensifying their examination of Amazon Web Services (AWS) and Microsoft Azure, contemplating whether these cloud computing giants should be classified as ‘gatekeepers’ under the EU’s Digital Markets Act (DMA). The DMA, a comprehensive regulatory framework, aims to curb the market dominance of major tech companies by imposing strict operational guidelines and penalties for non-compliance. Gatekeepers are subject to additional obligations, and the EU has already designated other segments of Amazon and Microsoft, such as Amazon Marketplace and LinkedIn, under this classification. However, applying the gatekeeper label to cloud services presents unique challenges, as it is partly based on user numbers, which are less straightforward to measure in the cloud computing sector. The European Commission is investigating whether AWS and Azure serve as critical intermediaries between businesses and consumers, despite not meeting the traditional thresholds. Market research indicates that these providers hold significant market power, influencing both business and consumer landscapes. The recent AWS outage, which disrupted internet services for hours, underscored the critical reliance of digital services, including artificial intelligence, on cloud computing platforms. AWS has expressed confidence that the European Commission will recognize the dynamic and competitive nature of the cloud sector, emphasizing the risks of stifling innovation and increasing costs for European companies. Microsoft has also highlighted the innovative and competitive environment of Europe’s cloud industry, pledging to cooperate with the Commission’s inquiry.
EU to assess whether Amazon and Microsoft cloud businesses need extra scrutiny
