The European Commission wants to subject Amazon and Microsoft's cloud computing services to stricter rules to ensure fair market functioning in the European Union.
A preliminary conclusion was published by the Commission on Thursday. It opened an investigation in November to determine whether Amazon Web Services (AWS) and Microsoft Azure should be referred to as so-called gatekeepers under European Digital Markets Legislation (DMA).
These are platforms that are subject to stricter rules because they have a crucial position on the market. This is the case for AWS and Azure, according to the Commission's preliminary conclusion.
Although the two US cloud computing services do not meet the quantitative thresholds for a gatekeeper designation, they still provide an important link between companies and their customers in the EU, according to the European Competition Watchdog.
The Commission points out that AWS and Azure have achieved "significant turnover" and that "their operational capacity and investments have far exceeded those of their competitors".
Both services also have "a bulky and loyal user base", with high exit costs for customers who want to change providers. AWS and Azure are the largest and second largest provider of cloud computing services in the EU.
Together they take up about 60% of the market. "Both Amazon and Microsoft appear to be in a strong and sustainable position in the sector," concludes the Commission, which also noted that AI applications from these groups have strengthened their position in the cloud.
Cloud computing is not only important for digital services, but also in numerous sectors, such as manufacturing and retail, healthcare and financial services. It also provides the backbone for the development and operation of AI services.
"That is why it is essential that we ensure a well-functioning and competitive market, and a level playing field for all cloud service providers," Commission Vice-President Teresa Ribera stressed in a press release.
Amazon and Microsoft can now review the investigation and respond to the Commission. Both companies are already reacting dissatisfied. An AWS spokesperson criticised "a new, cumbersome and unnecessary layer of regulations" and a Microsoft spokesperson wondered why Google Cloud was not included in the study.
However, according to a Commission spokesperson, Google's service does not currently appear to take "the same leading role" as AWS and Azure in the European cloud sector.
With the DMA, the EU wants to ensure that tech giants do not abuse a dominant market position and stimulate competition.
So-called gatekeepers, including an average European annual turnover of 7.5 billion euros or more and 45 million monthly end users, must comply with stricter rules, including in terms of interoperability. Other services from Amazon and Microsoft had previously been referred to as gatekeepers.
This also applies to various services from Alphabet (Google), Apple, ByteDance, Meta and Booking.com.
