European Commission preliminarily designated Amazon Web Services and Microsoft Azure as digital market gatekeepers under the Digital Markets Act (DMA), imposing stricter interoperability and compliance obligations.

The European Commission has reached a preliminary position that Azure and AWS should be designated as gatekeepers under the Digital Markets Act (DMA). The designation would impose specific requirements on both cloud providers, with penalties reaching up to 10 percent of worldwide turnover for non-compliance.

According to the Commission, AWS and Azure—"the largest and second largest cloud computing services in the EU respectively"—function as gateways between European businesses and their customers. Both companies "have vast and entrenched user bases and appear to benefit from lock-in effects and high switching costs, in addition to a large ecosystem."

While neither cloud provider met the DMA's quantitative thresholds for designation, such as specified user numbers, their dominant market positions warranted regulatory scrutiny. Should the designations be confirmed, the companies would face obligations regarding interoperability, data access, and competition practices. The preliminary determination is subject to response from both Amazon and Microsoft before any final decision.

Microsoft stated through a spokesperson: "We continue to engage constructively with the Commission. The cloud sector in Europe is innovative, highly competitive and an accelerator for growth across the economy." The company expressed concern that "ignoring the growing power of Google Cloud and Gemini will tilt the market in a harmful way."

AWS similarly rejected the Commission's findings, asserting: "The Commission's preliminary findings disregard the breadth of cloud services available to European customers and risk deterring European investment and innovation. AWS faces healthy competition and customers across Europe have more choice, lower prices, and greater flexibility than ever before." AWS further argued that existing EU cloud regulation through the Data Act makes additional DMA obligations redundant and counterproductive.

The Open Cloud Coalition welcomed the designation, noting that "existing customer lock-in may fuel enterprise AI, a development that mirrors long-standing market concerns over Microsoft's licensing and ecosystem practices." The group called for rapid implementation of remedies to preserve customer choice and growth.

Henna Virkkunen, the European Commission's executive vice-president for tech sovereignty, security and democracy, emphasized that "Cloud services have become a cornerstone of Europe's economy – and a prerequisite for AI – with over half of EU businesses now relying on them, combined with record investment in public cloud infrastructure." She stressed that these services "must operate in fair, open and competitive markets that foster trust and secure Europe's tech sovereignty."

If confirmed, the gatekeeper designations would give Microsoft and Amazon six months to ensure compliance with the DMA's obligations. Both companies already hold gatekeeper status under the Act for other services.