The European Union has taken a major step toward applying its landmark Digital Markets Act to the cloud computing units of Microsoft Corp. and Amazon.com Inc., potentially subjecting Azure and Amazon Web Services to strict new obligations.
Preliminary Findings Target Cloud Giants
In preliminary findings issued Thursday, the European Commission said that Azure and AWS are the largest and second-largest cloud computing services in the EU respectively. The regulators noted that the two platforms have achieved significant turnover and that their operational capacity and investments have outpaced those of competitors.
EU competition chief Teresa Ribera stated that the services “will only continue to grow in importance, which is why it is essential that we ensure a well-functioning and competitive market, and a level playing field for all cloud service providers.”
Potential Obligations Under the DMA
If the Commission concludes its probe and designates Azure and AWS as gatekeepers under the DMA, they would face a range of obligations. These include interoperability requirements, curbs on customer lock-in, and prohibitions on self-preferencing. The DMA was designed to prevent abusive conduct by dominant digital platforms before it becomes entrenched.
Bloomberg News earlier reported on the escalation. The Commission said that Amazon and Microsoft have the right to contest the preliminary findings before a final decision is made.
Industry and Company Reactions
An AWS spokesperson criticized the preliminary findings, saying they “disregard the breadth of cloud services available to European customers and risk deterring European investment and innovation.”
Microsoft also pushed back, arguing that the Commission should have targeted Alphabet Inc.’s Google Cloud as well. The company said it is “concerned that ignoring the growing power of Google Cloud and Gemini will tilt the market in a harmful way.”
Broader Trade and Political Context
The DMA has drawn the ire of U.S. President Donald Trump and has complicated transatlantic trade talks. Apple Inc. and Meta Platforms Inc. have already been hit with financial penalties for alleged breaches of the law—€500 million (US$568 million) and €200 million respectively.
Regulators first signaled action in November 2023, saying that Microsoft and Amazon “occupy very strong positions” in the cloud market and launching a formal market investigation. The preliminary findings mark a key step in that process, though the companies can still challenge the decision.
