Microsoft Azure and Amazon Web Services face strict EU regulations after European regulators designated the cloud giants as gatekeepers under the bloc's Digital Markets Act. The designation subjects their operations to new compliance requirements.
Microsoft and Amazon's cloud divisions have been formally identified by EU regulators as gatekeepers under the Digital Markets Act (DMA), triggering mandatory compliance obligations that could reshape how the companies operate in Europe.
The DMA targets large digital platforms that control critical infrastructure for business users. Azure and AWS, which dominate European cloud infrastructure markets, now face requirements to ensure interoperability, prevent anti-competitive practices, and provide transparency in their algorithms and data handling.
Under the rules, both companies must allow users to switch providers more easily, grant competitors access to essential services, and refrain from leveraging their cloud dominance to favor their own software offerings. They must also comply with data transparency requirements and cannot self-preference their own services over competitors' offerings on their platforms.
The designation follows a broader EU push to rein in big tech companies. Regulators previously identified Google, Meta, and Apple as gatekeepers under the same legislation. The DMA took effect in March 2024, with companies given months to demonstrate compliance.
Compliance costs could be substantial. Companies designated as gatekeepers must implement technical changes, establish monitoring systems, and face penalties up to 10% of global revenue for violations.
Amazon and Microsoft are expected to challenge the specifics of their obligations during implementation periods. AWS in particular holds roughly 30% of the European cloud market, making it a primary regulatory focus.
The move reflects EU determination to regulate critical digital infrastructure independently of U.S. regulatory frameworks. European policymakers argue tech giants have accumulated excessive control over digital ecosystems, limiting competition and innovation.
Both companies have signaled intent to comply with EU rules, though they continue advocating for more flexible implementation timelines. The enforcement period will test whether the DMA's guardrails effectively level the competitive landscape in European cloud markets.
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