Amazon and Microsoft Cloud Businesses Could Face Greater EU Regulation

European regulators say Amazon’s and Microsoft’s cloud businesses should fall under the Digital Markets Act (DMA).

The European Commission said in a Wednesday (June 24) press release that it had informed both tech giants of its preliminary finding that they should be considered “gatekeepers” under the DMA for their cloud computing services, Amazon Web Services (AWS) and Microsoft Azure.

“In both cases, the Commission preliminarily finds that AWS and Azure, the largest and second largest cloud computing services in the EU respectively, are an important gateway between businesses and their customers in the EU,” per the release. “This is the case despite them not meeting the DMA’s quantitative thresholds for designation.”

The DMA, which came into force in 2023, established stringent rules for major online platforms, designed to prevent anti-competitive behavior. The “gatekeeper” designation applies to companies with at least 45 million end users and 10,000 business users in Europe, and a yearly turnover of 7.5 billion euros across the continent for the previous three financial years.

Amazon and Microsoft have been given the gatekeeper designation for other services, but the commission said this label should also apply to their cloud business, which have “achieved significant turnover, and their operational capacity and investments seem to have significantly outpaced those of competitors.”

The EC also notes that AWS and Azure seem to have benefitted from increased AI-related demand for cloud services, and “appear to hold an entrenched and durable position in the EU cloud computing sector, as is evidenced by AWS and Azure’s leading market position over many years.”

A spokesperson for Microsoft said th company was still engaging “constructively” with the commission in a statement provided to PYMNTS.

“The cloud sector in Europe is innovative, highly competitive and an accelerator for growth across the economy,” the statement added. “We remain concerned that ignoring the growing power of Google Cloud and Gemini will tilt the market in a harmful way.”

Amazon issued a statement in response to the EC’s preliminary findings, arguing they “disregard the breadth of cloud services available to European customers and risk deterring European investment and innovation.

“AWS faces healthy competition and customers across Europe have more choice, lower prices, and greater flexibility than ever before,” the company said.

“The EU already has comprehensive cloud regulation through the Data Act, and adding another heavy layer of overlapping regulation under the DMA undermines European competitiveness and access to cutting-edge information technology.”

The company also cites a study published by Copenhagen Economics and commissioned by AWS which found more than 200 active European cloud providers that have held a roughly 15% share of revenue since 2022.