European Union regulators are close to concluding that Microsoft’s Azure and Amazon’s cloud unit meet the conditions to be regulated under the bloc’s Digital Markets Act, a step that would extend the region’s toughest platform rules into the heart of the cloud-computing business, according to people familiar with the matter.
The investigation into the two cloud businesses is in its final stages, the people said. The conclusion, once adopted, would find that both Azure and Amazon Web Services qualify for designation under the law, which imposes a set of obligations on companies deemed to hold a gatekeeper role. A decision is planned for November, though it remains a draft and the timing could slip.
The Digital Markets Act was written with app stores, search engines and social networks in mind. Applying it to cloud services would mark a new phase for the law, one that reaches into the infrastructure on which much of the European economy now runs. Designation would carry obligations on how the companies can bundle services, price offerings and treat rival providers and customers on their platforms.
The obligations that follow designation are specific. A gatekeeper must open certain services to competitors, must not favor its own products over rivals on its platforms, and must give business users access to the data their activity generates. Violations carry fines of up to 10% of global annual revenue, with repeat offenses reaching twice that amount.
The push comes at a moment when the cloud industry’s reliability has been called into question. Europe has weathered a string of large outages that took down services across the continent, in some cases knocking out the applications that airlines, banks and public agencies depend on. Each incident has strengthened the argument, inside the Commission and beyond, that concentration in a few cloud providers is itself a risk.
There is a strategic dimension as well. European officials have spoken openly about the vulnerability that comes from relying on cloud services run by companies based outside the bloc, mostly American ones. The argument is less about any single company’s behavior and more about what happens if the region’s data and processing power are controlled from a distance, under legal systems Brussels cannot shape.
The law has already reshaped how the largest platforms operate in Europe. Several major technology companies have been designated since the act took effect, forcing changes to app stores, search results and messaging services. Adding cloud computing to that list would be a natural extension of a process Brussels has shown it intends to pursue, industry by industry.
For Microsoft and Amazon, the stakes are considerable. Both have invested heavily in European data centers and employ large numbers of people across the region. A designation under the Digital Markets Act would add a new layer of compliance and could constrain how they package their cloud services with other products, a practice that rivals have long complained about.
The two companies have pushed back during the investigation, arguing among other things that the cloud market is competitive and that their services face strong rivals in Europe. Whether the Commission’s final finding accepts that view, or concludes that the two firms hold entrenched positions, will shape the remedies that follow.
Azure and Amazon Web Services together account for a large share of the money European businesses spend on cloud computing, and that share sits at the center of the regulators’ case. The companies argue the market is broader than the labels suggest, pointing to competitors and to the ease with which customers can use more than one provider. The Commission’s final finding will, in effect, decide which description is the accurate one.
The draft status of the decision leaves room for the outcome to shift. People familiar with the process cautioned that the November date is an internal target, not a commitment, and that final conclusions can be revised as officials review the evidence and the companies’ responses. In Brussels, a planned decision has a way of arriving later than planned.
Still, the direction is clear. The EU has spent the past several years extending its regulatory reach from the digital storefront to the digital supply chain, and the cloud is the next layer down. Bringing Azure and AWS under the Digital Markets Act would be the clearest signal yet that the region regards cloud infrastructure the way it regards the platforms that sit on top of it: big enough, and important enough, to require rules written specifically for it.
The companies will have little choice but to respond once the decision lands. Designation under the law sets in motion a process of obligations, reporting and possible fines for noncompliance that can reach into the billions of euros. For now, the finding is still a draft, and the only certainty is that the cloud, long treated as a utility that simply worked, has become a political question in its own right.
