The European Commission has taken a major step toward regulating cloud computing, preliminarily concluding that Amazon Web Services and Microsoft Azure should fall under the EU's Digital Markets Act (DMA), a sweeping regulation designed to rein in Big Tech's market power. This marks the first time Europe's most powerful tech regulation has extended into cloud infrastructure, affecting a market worth approximately 220 billion euros annually.

What Does This Mean for Amazon and Microsoft?

The DMA is a bespoke regulatory regime that imposes specific rules on companies deemed "gatekeepers" in digital markets. If Amazon and Microsoft are formally designated under the DMA, they would face significant operational requirements. The regulation would oblige both companies to make it easier and cheaper for customers to switch to rival cloud providers or to use multiple services simultaneously, and to eliminate practices that regulators consider unfair.

Both companies now have the opportunity to present arguments against the designation before the Commission reaches a final decision by December 2026. Amazon has already pushed back, arguing that the DMA was not designed for a market like cloud computing. A spokesperson for Amazon Web Services noted that "the Commission's preliminary findings disregard the breadth of cloud services available to European customers and risk deterring European investment and innovation," pointing out that the EU already regulates the sector under the Data Act.

Microsoft raised a different concern, arguing that the designation is incomplete. The company expressed worry that Google Cloud, the third major player in the European cloud market, was being left out of the gatekeeper designation. "We remain concerned that ignoring the growing power of Google Cloud and Gemini will tilt the market in a harmful way," a Microsoft spokesperson stated.

How Does This Fit Into Europe's Broader AI Regulation Strategy?

This cloud designation represents a significant expansion of the DMA, which has so far focused on consumer-facing platforms like app stores and search engines. The Commission is also conducting a separate procedure to determine whether the DMA's existing rulebook, largely designed for consumer-facing services, is appropriate for cloud computing. This review is expected to produce recommendations by May 2027.

The timing is politically sensitive. The Trump administration has repeatedly characterized European tech regulation as an attack on American companies. Adding two of the most commercially significant U.S. cloud businesses to the gatekeeper list will likely intensify that friction.

Steps Companies May Need to Take to Comply

• Customer Portability: Cloud providers would need to implement technical and contractual measures that make it simpler and more affordable for customers to migrate their data and applications to competing cloud services without incurring prohibitive switching costs.
• Multi-Cloud Support: Designated gatekeepers must remove technical or contractual barriers that prevent customers from using multiple cloud providers simultaneously, enabling greater flexibility and reducing vendor lock-in.
• Fair Practice Standards: Companies must eliminate practices deemed unfair by regulators, which could include preferential treatment of their own services, discriminatory pricing, or bundling arrangements that disadvantage competitors.

The Commission's decision follows a market investigation launched in November 2025. Executive Vice-President Teresa Ribera explained the rationale for the expansion, stating that "these services will only continue to grow in importance, which is why it is essential that we ensure a well-functioning and competitive market".

Teresa Ribera

The cloud computing market in Europe has become increasingly concentrated, with Amazon Web Services, Microsoft Azure, and Google Cloud controlling the vast majority of the market. By bringing cloud infrastructure under the DMA framework, the EU is attempting to prevent the same market concentration patterns that have emerged in consumer-facing digital services from repeating in the infrastructure layer that underpins much of the digital economy.

The formal designation process will likely shape how cloud services are delivered across Europe for years to come, potentially affecting everything from pricing structures to data portability standards. Companies operating in the European cloud market should prepare for more stringent compliance requirements, regardless of whether they are formally designated as gatekeepers.