European regulators dropped a bombshell on the cloud industry this week. On June 25, 2026, the European Commission formally proposed designating Amazon Web Services (AWS) and Microsoft Azure as gatekeepers under the bloc’s Digital Markets Act (DMA). The decision caps a seven‑month investigation that zeroed in on how these two hyperscalers wield their dominance to lock customers into proprietary AI services. If finalized, the move would force both companies to tear down walled gardens, share data with rivals, and stop self‑preferencing their own AI tools—a seismic shift for the $300 billion cloud market.
The DMA, which entered into force in 2022, aims to make digital markets fairer and more contestable. It targets so‑called gatekeepers: large platforms that provide a core platform service, serve as a key gateway between businesses and consumers, and enjoy an entrenched position. To date, the Commission has designated six companies—Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft—for specific services like online marketplaces, social networks, and operating systems. Until now, however, cloud computing and AI‑as‑a‑service had never been squarely in the DMA’s sights. The June 25 designation marks the first time a cloud infrastructure service has been proposed as a core platform service under the regulation.
Brussels launched its investigation on November 21, 2025, after receiving complaints from European cloud providers, business users, and AI startups. The complainants argued that AWS and Azure use a combination of technical bundling, data gravity, and contractual restrictions to make it prohibitively difficult for customers to switch providers or adopt multi‑cloud strategies. The Commission’s seven‑month probe examined market shares, user feedback, and the role of AI services in reinforcing lock‑in. According to a leaked summary of the findings, AWS holds roughly 33% of the European cloud market, with Azure at 27%—together controlling three‑fifths of all cloud spending in the region. More critically, the investigation found that over 80% of enterprises using Azure’s AI tools also rely on other Azure services, while AWS’s SageMaker and Bedrock customers have a 90% overlap with core compute and storage products.
The timing of the designation is no accident. AI adoption is surging across Europe, and with it, concerns about sovereignty, vendor lock‑in, and the ability of local challengers to compete. The Commission’s competition chief, Margrethe Vestager, said in a press conference that “cloud AI services are not just another layer of software—they are becoming the operating system of the enterprise. When a handful of firms control both the infrastructure and the AI models that run on it, the risk of lock‑in becomes a risk to Europe’s digital autonomy.”
Under the DMA, designated gatekeepers face a long list of dos and don’ts. They must allow third‑party services to interoperate with their own, provide businesses access to the data they generate on the platform, and allow users to uninstall pre‑loaded applications. Crucially, they are forbidden from using data collected from business users to compete against them, and from ranking their own products more favorably than competitors’. For AWS and Azure, these obligations could reshape the entire cloud AI stack.
Consider the case of a German automotive supplier building a predictive maintenance model. Today, if it trains that model on Azure using Azure’s proprietary AI chips and Copilot services, it likely writes code that is tightly coupled to Azure’s APIs, stores data in Azure Blob Storage, and serves predictions via Azure Kubernetes Service. The DMA would require Microsoft to provide open APIs and data portability that let the supplier move its trained model and associated data to another cloud—say, Deutsche Telekom’s Open Telekom Cloud—without retraining or rewriting code. Similarly, AWS would have to ensure that a retail chain using Amazon Bedrock to build a customer chatbot can export the underlying foundation model and conversational data to a European AI platform like Aleph Alpha.
The obligations go beyond technical interoperability. The DMA’s anti‑self‑preferencing clause could force hyperscalers to unbundle AI services from core infrastructure. Microsoft, for example, might be barred from making Azure OpenAI Service the default language model for customers who sign up for Azure AI, and instead offer a choice from a catalogue of third‑party models—including those hosted on rival clouds. Amazon could be required to list non‑AWS AI tools in its Marketplace with the same prominence it gives to its own offerings.
For Windows enthusiasts, the ripple effects are immediate. Azure is deeply integrated into the Microsoft ecosystem: Windows Server, Visual Studio, GitHub Copilot, Power Platform, and even the consumer‑facing Microsoft 365 Copilot all draw on Azure’s AI services. If Microsoft is compelled to open those back‑end services to competitors, it could accelerate a trend where Windows applications consume AI from multiple clouds. Enterprise Windows shops might soon configure Group Policy settings that point a desktop’s Copilot assistant to a European AI model running on a sovereign cloud, rather than defaulting to Azure. IT admins who manage hybrid Windows environments may find new tools to audit and migrate AI workloads across clouds, lowering the barrier to multi‑cloud strategies.
The designation also lands at a delicate moment for transatlantic tech relations. The United States has repeatedly criticized the DMA as a de facto tariff on American tech firms. Both AWS and Azure are likely to challenge the decision in court, arguing that the cloud market is already fiercely competitive and that their AI investments benefit European businesses. In a statement, an AWS spokesperson said the company is “disappointed” and that its services “give European enterprises the AI tools they need to compete globally, without locking them in.” Microsoft echoed the sentiment, noting that its Azure Arc and multi‑cloud management tools already allow customers to run Azure services on rival infrastructure.
Yet these arguments may not sway Brussels. The Commission appears to be drawing a line in the sand: AI is too strategic to be monopolized. Beyond the immediate compliance obligations—which would kick in six months after designation is confirmed, likely by September 2026—the DMA empowers regulators to impose fines of up to 10% of global annual turnover for non‑compliance. For Microsoft and Amazon, that could translate into multibillion‑dollar penalties. More ominously, the Commission can force structural remedies, including breaking up a gatekeeper’s business, if violations persist.
The designation also sends a signal to other jurisdictions. The UK’s Competition and Markets Authority is already consulting on analogous rules under its Digital Markets, Competition and Consumers Act. Observers expect the CMA to follow Brussels’ lead, potentially forcing AWS and Azure to open up in the British market as well. In Asia, Japan and South Korea have been discussing similar AI competition frameworks, and the EU’s move may provide a template.
For European cloud providers, the news is a long‑awaited victory. OVHcloud, Scaleway, Ionos, and Deutsche Telekom have lobbied for years against what they call unfair practices by hyperscalers. Their EU‑based AI platforms—often focused on data sovereignty and privacy—could now finally compete on a more level playing field. For startups, the DMA promises cheaper and easier multi‑cloud AI, potentially unleashing a wave of innovation as models and data become portable. Critics warn, however, that forced interoperability could introduce security risks, degrade performance, and slow the pace of AI development if hyperscalers shift resources away from R&D to compliance.
The cloud industry now faces a period of profound uncertainty. AWS and Azure engineers are likely already sketching out compliance architectures, while their legal teams prepare for a fight. The final designation is subject to a two‑month comment period, and the companies can request an oral hearing. If history is any guide, the process will be contentious, with lobbying efforts intensifying on both sides of the Atlantic.
One thing is clear: the DMA’s gatekeeper framework has entered the AI age. For Windows users and the broader enterprise IT community, the decision promises to reshape how AI is built, bought, and managed. Multi‑cloud AI may finally move from marketing slideware to an enforceable right. And the two giants of the cloud will have to learn to compete without the crutch of ecosystem lock‑in.