Europe Signals Its Cloud Crackdown May Be About to Get Much Bigger

Key Takeaways

• DMA Could Expand Into Cloud Infrastructure: The European Commission has preliminarily concluded that AWS and Microsoft Azure should be designated as gatekeepers despite not meeting the DMA's standard quantitative thresholds.
• AI Became Part of the Competition Analysis: Regulators argue that AI capabilities and partnerships now influence cloud purchasing decisions and reinforce the market positions of AWS and Azure.
• Market Power Extends Beyond Scale: The Commission cited switching costs, lock-in effects, ecosystem breadth, investment levels and durable market positions as evidence supporting designation.
• Rights of Defense Remain: Amazon and Microsoft may review the Commission's investigation file and submit written responses before any final decision is adopted.
• Compliance Would Follow Final Designation: If designated, AWS and Azure would have six months to comply with the Digital Markets Act's obligations.

Deep Dive

The European Commission has taken a step that would have seemed improbable when the Digital Markets Act first came into force. It has told Amazon and Microsoft that it preliminarily believes their cloud businesses (Amazon Web Services and Microsoft Azure) should be designated as gatekeepers under the DMA, even though neither service meets the law's standard quantitative thresholds.

That distinction matters. The DMA was built around measurable thresholds intended to identify digital platforms with outsized influence. The Commission is now making use of another power embedded in the legislation: the ability to designate a company after a market investigation if the evidence points to lasting market power that the numbers alone fail to capture.

In Brussels' telling, the cloud market has reached precisely that point. The Commission's preliminary assessment argues that AWS and Azure have become indispensable gateways between businesses and their customers across the European Union. AWS remains the largest cloud computing provider in the bloc, with Azure second. Size alone is not the Commission's case. It points instead to a combination of factors that, taken together, describe markets that become progressively harder to leave once customers have entered them.

Those factors will sound familiar to anyone who follows competition policy. The Commission points to extensive customer bases, significant revenues, operational capacity and investment levels that appear to have outpaced rivals, high switching costs, lock-in effects, expansive ecosystems, and corporate structures that reinforce their positions across multiple markets. Its preliminary conclusion is that these advantages have become both entrenched and durable.

Artificial intelligence occupies a surprisingly central place in that reasoning. The Commission argues that AI is no longer simply another workload running on cloud infrastructure. It has become a deciding factor in how enterprises choose cloud providers in the first place. As organizations invest more heavily in AI, demand for cloud services grows alongside it. According to the Commission's preliminary findings, AWS and Azure appear to retain a large share of that additional demand within their own ecosystems through their AI offerings and strategic partnerships.

That observation reveals something broader about how European regulators increasingly view competition. They are paying less attention to products in isolation than to the gravitational pull of ecosystems. The concern is not merely that companies dominate cloud infrastructure. It is that cloud infrastructure, AI platforms, software portfolios and developer tools increasingly reinforce one another in ways that make competition progressively more difficult.

A Strategic Industry, Not Just Another Digital Market

The Commission places unusual emphasis on why cloud computing deserves separate attention. Cloud infrastructure has become the operating foundation for much of Europe's economy. Manufacturing, retail, healthcare, financial services and public administration all depend on it in different ways. It is also the infrastructure on which modern AI systems are developed and deployed.

Ensuring that market remains open and competitive, the Commission argues, has implications that extend beyond competition policy into innovation and Europe's broader ambitions for technological sovereignty. Those themes have become increasingly prominent across European digital regulation over the past several years. The preliminary findings fit comfortably within that larger policy direction.

The Commission launched its market investigations into AWS and Azure in November 2025, gathering evidence from business users, competitors and other stakeholders. A separate investigation, opened at the same time, continues to examine whether the DMA's existing obligations are sufficient to address practices that may restrict competition in cloud computing more generally. The investigations are being conducted with support from the Dutch Authority for Consumers and Markets through a joint investigative team established under the DMA.

No final decision has been made. Amazon and Microsoft will now be given access to the Commission's case file and an opportunity to respond to the preliminary findings before any designation is adopted. The Commission stressed that the current conclusions do not prejudge the outcome of the investigations. If those preliminary findings ultimately stand, AWS and Azure would formally become gatekeepers under the Digital Markets Act. Both companies would then have six months to bring their cloud services into compliance with the DMA's obligations.

For years, Europe's digital competition agenda focused largely on search engines, mobile operating systems, social media platforms and app stores. This preliminary decision suggests the Commission increasingly sees cloud infrastructure not as the platform beneath those markets, but as one of the markets that now shapes everything above it.

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