EU Launches Trio of Investigations into Cloud Computing Giants Amazon and Microsoft
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The European Commission has initiated three separate market investigations into the cloud computing services offered by Amazon and Microsoft, signaling a major push to ensure fair competition in a sector deemed critical for Europe’s digital future. The investigations, launched on Thursday, center on whether the tech behemoths should be designated as “gatekeepers” under the Digital Markets Act (DMA), even if they don’t currently meet the established size thresholds.
The Commission underscored that cloud computing serves as the “backbone” of many digital services and is fundamental to the development of artificial intelligence. Promoting innovation, trust, and strategic autonomy within Europe, a senior official stated, “requires that cloud services are provided in a fair, open and competitive environment.”
Assessing Gatekeeper Status for AWS and Azure
Two of the investigations specifically focus on Amazon Web Services (AWS) and Microsoft Azure, the dominant players in the cloud infrastructure market. The Commission will evaluate whether to add these services to the list of Core Platform Services, thereby subjecting them to the obligations outlined in the DMA. This move is significant because it suggests the Commission is willing to enforce the DMA’s rules even for companies that technically fall below the established criteria for size, user base, and market position.
These initial investigations are expected to conclude within 12 months. Should AWS and Azure be designated as gatekeepers, both companies would have an additional six months to fully comply with the DMA’s requirements.
Scrutinizing the Effectiveness of the DMA
The third investigation takes a broader approach, seeking to determine whether the current obligations under the DMA are sufficient to prevent anti-competitive practices within the cloud computing landscape. This survey will involve gathering information from various market operators and will specifically examine barriers to interoperability between cloud services, restrictions on data access for business users, the practice of bundling services, and potentially unfair contract terms.
Microsoft Cooperation, Amazon Concerns
While no specific companies were named beyond Amazon and Microsoft, observers believe the investigation will likely scrutinize Microsoft’s practices, particularly accusations that the company hinders transitions to alternative cloud providers due to the close integration between Azure and Office. According to a company release, Microsoft has communicated its intention to fully cooperate with the European Commission.
However, Amazon expressed concerns that being designated a gatekeeper would stifle innovation and increase costs for European businesses. “Any designation as a gatekeeper will harm innovation and increase costs for European companies,” a company spokesperson stated.
The findings of these investigations, particularly the third, could lead to updates to the DMA’s cloud-related obligations, potentially reshaping the competitive dynamics of the European cloud market over the next 18 months. This represents a significant step towards ensuring a more level playing field and fostering a thriving digital ecosystem within the European Union.
