EU to assess whether Amazon and Microsoft cloud businesses need extra scrutiny

The European Union is considering whether to impose stricter regulations on the cloud services offered by Amazon and Microsoft. This review comes as the EU examines if Amazon Web Services (AWS) and Microsoft Azure should be designated as 'gatekeepers' under the Digital Markets Act (DMA). The European Commission announced on Tuesday that it is evaluating the potential classification of these cloud services amid ongoing concerns over the market dominance of major tech firms. The DMA aims to curb the power of large technology companies by implementing a series of rules and penalties designed to ensure fair competition. Although the designation of 'gatekeepers' has already been applied to other services from Amazon and Microsoft, such as Amazon Marketplace and LinkedIn, applying it to cloud services is more complex due to user metrics. The Commission will assess whether AWS and Azure function as vital conduits between businesses and consumers, despite not meeting the usual criteria. Market analysis shows that cloud providers like AWS and Azure maintain strong footholds within both business and consumer sectors. The cloud computing model allows organizations to utilize extensive computing resources remotely, eliminating the need for expensive physical infrastructure. The recent outage of Amazon Web Services, which significantly disrupted internet services, underscored the critical reliance many sectors, including artificial intelligence, have on these cloud providers. In response to the EU's inquiry, Amazon Web Services expressed confidence that the Commission would recognize the dynamic nature of the cloud computing industry. They argued that the sector is characterized by extensive options, innovation, and low costs, suggesting that labeling cloud providers as gatekeepers could hinder innovation and increase expenses for European businesses. Meanwhile, Microsoft emphasized the competitiveness and innovation present within Europe's cloud market and expressed its willingness to assist the European Commission in its investigation.