EU names AWS, Azure gatekeepers under Digital Markets Act

The European Commission preliminarily designated Amazon Web Services and Microsoft Azure as "gatekeepers" under the Digital Markets Act Thursday, marking an unprecedented move to regulate cloud dominance based on market impact rather than quantitative metrics alone.

In spite of failing to reach the user number and revenue criteria required by the DMA, AWS and Azure circumvented the conventional gatekeeper standards and were found to be the first and second largest cloud providers in the EU.

The investigators then looked at whether the companies occupied an entrenched position acting as a gateway between businesses and their customers.

Clean, Just and Competitive Transition Executive Vice-President Teresa Ribera stated the move was essential: "These 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."

AI alliances and instruments were highlighted by the Commission as crucial elements of cloud procurement. AWS and Azure have brought AI demands into their own ecosystems in a way that the rest of the competitors are behind a network effect that the DMA wants to regulate. More than half of EU companies now use cloud technology, and investment records show that more work on AI will be done using these two platforms.

Amazon disputed the report, saying that it "fails to account for the range of cloud solutions available to European consumers" and poses a risk of discouraging investment. Microsoft referred to the growing strength of Google Cloud, pointing out that the Commission’s initial opinion “risks tilting the market in an unhealthy direction” because of competition concerns.

Both Amazon and Microsoft have six months to challenge the Commission's findings before designation is made final.