Amazon Web Services and Microsoft Azure must be designated as “gatekeepers” under the Digital Markets Act (DMA), the European Commission’s competition authority declared on June 25, 2026, following a seven‑month investigation into their dominance in cloud computing and the adjacent artificial intelligence market. The preliminary finding immediately rolls out a new regulatory carpet under the two hyperscalers, forcing them to comply with a strict set of obligations designed to dismantle barriers for smaller rivals and give European businesses more freedom when choosing cloud and AI services.

The probe, launched in late 2025, examined whether AWS and Azure hold an “entrenched and durable position” in the market for cloud infrastructure and platform services, and whether their control extends to the fast‑growing layer of foundational AI models and developer tools that increasingly run on their infrastructure. Regulators concluded that both companies meet the quantitative thresholds laid out in the DMA — annual turnover in the European Economic Area above €7.5 billion, market capitalisation over €75 billion, and active users of a core platform service in the EU — but, more critically, they hold a qualitative gatekeeper role that stifles competition.

“No cloud is an island anymore,” said a senior Commission official during a background briefing. “Hyperscalers are not just renting raw compute; they shape how companies adopt AI, where data lives, and how easily customers can switch. Our investigation shows that AWS and Azure leverage their infrastructure muscle to lock in customers and tilt the AI playing field in their favour.”

The decision marks an expansion of the DMA beyond the consumer‑facing platforms it originally targeted — search engines, social networks, app stores. It is the first time core enterprise‑oriented cloud services are directly captured under the regulation, a step that Brussels had long signalled but hesitated to take until the link between cloud power and AI control became impossible to ignore.

What the DMA gatekeeper label means for AWS and Azure

Once formally designated — a final decision is expected by September 2026 after a public consultation — AWS and Azure will be hit with a list of do’s and don’ts that fundamentally alter how they package, price, and operate their cloud offerings in the EU. Among the most disruptive:

  • Interoperability mandates: Customers must be able to port their data and workloads to rival providers without technical or contractual friction. This could outlaw proprietary data formats and APIs that make migration costly.
  • Ban on self‑preferencing: Hyperscalers cannot rank their own AI services or cloud tools higher than third‑party alternatives in their marketplaces or recommendation engines.
  • Fair access for business users: Smaller cloud providers, AI start‑ups, and independent software vendors must have non‑discriminatory access to the same infrastructure quality and APIs that the gatekeeper’s own services enjoy.
  • Prohibition on leveraging data exclusivity: AWS and Azure cannot use data generated by third‑party businesses on their clouds to train proprietary AI models unless that data is also made available to competitors on fair terms.
  • Advance notice of M&A: Any acquisition of a cloud, AI, or adjacent technology firm, no matter the size, must be notified to the Commission to forestall killer acquisitions.

Non‑compliance risks fines up to 10% of global annual turnover, rising to 20% for repeat offences — a tally that for AWS alone could exceed $10 billion based on 2025 revenue. Structural remedies, such as splitting the AI business from the cloud infrastructure arm, remain on the table as a last resort if behavioural rules are flouted.

The AI angle: Why Brussels widened the lens

The investigation quickly zeroed in on how cloud dominance gives Amazon and Microsoft an unfair advantage in AI. Both companies have invested heavily in large language models (LLMs) and offer them as a service — Amazon with Bedrock and its Titan models, Microsoft via its deep partnership with OpenAI and the Azure OpenAI Service. By bundling AI development tools with cloud credits, lobbying for exclusive model deployment relationships, and requiring that AI workloads run on their proprietary silicon, the pair are accused of creating a “walled garden” for the next wave of digital innovation.

“If you’re a start‑up building a new application, you’re not just choosing a cloud; you’re choosing an AI ecosystem,” explained Professor Helena Danner, competition law specialist at the University of Leuven. “The Commission is saying that the cloud is the gateway to AI, and the gatekeepers are the same companies that dominate the underlying infrastructure. This dual lock‑in is the real target.”

The DMA obligations will force AWS and Azure to unbundle AI services from infrastructure contracts, meaning a customer must be able to run a Google‑trained model on Azure or an Anthropic model on AWS without penalty, and to mix and match cloud providers with AI model providers freely. Early reporting suggests Microsoft may be asked to alter its Azure‑OpenAI revenue‑sharing agreement to give customers the right to use OpenAI’s models on competing clouds without Microsoft retribution.

Industry and political reactions

The preliminary finding split the tech world along familiar lines. European cloud challengers like OVHcloud, Scaleway, and Deutsche Telekom’s T‑Systems welcomed the move, with CISPE (Cloud Infrastructure Services Providers in Europe) calling it “the fair‑play reset the market has waited a decade for.” CISPE, which settled an earlier complaint with Microsoft in 2024, said the DMA probe addresses the root causes of unfair software licensing and bundling that the settlement only partly cured.

Amazon and Microsoft pushed back swiftly. In a statement, AWS said it was “disappointed by the preliminary view” and argued that the cloud market “remains fiercely contested with intense competition from Google Cloud, Alibaba Cloud, and a vibrant array of EU‑based providers.” The company highlighted its “multi‑billion‑euro investments in European data centres and renewable energy projects,” hinting that a gatekeeper designation could slow such spending.

Microsoft’s response was more combative. “This is a misguided attempt to punish American success,” a company spokesperson said. “Azure offers customers unprecedented choice in AI models — from OpenAI, Meta, Llama, Mistral, and others — and we operate under voluntary interoperability standards that go beyond any regulation. The Commission is creating a straitjacket for innovation.” The company also signalled it might challenge a final designation in the EU’s General Court, a process that could delay enforcement for years.

Politically, the announcement landed in a transatlantic tension zone. The US Trade Representative immediately expressed concern, noting that “the EU’s expanding use of digital gatekeeper designations risks turning into a de facto tax on US companies and may complicate ongoing trade dialogues.” European Commission Executive Vice‑President for Competition, however, insisted the DMA is “platform‑neutral, country‑neutral, and solely focused on contestability and fairness.”

What happens next: Timeline and enforcement

The Commission will now run a six‑to‑eight‑week public consultation, inviting feedback from cloud customers, competitors, AI developers, and civil society. AWS and Azure can submit rebuttals and propose commitments — such as voluntary interoperability standards or firewalls between their infrastructure and AI units — that might avoid full‑scale designation, though officials caution the bar for such settlements is high.

Simultaneously, the Commission is assessing whether Google Cloud meets the gatekeeper thresholds. While Google trails AWS and Azure in European market share, its strength in certain sub‑markets (e.g., AI developer tools, BigQuery) could trigger a parallel investigation. Alibaba Cloud, which has a small but growing footprint in Europe, is also being monitored.

By early 2027, if designations are confirmed, the rules take effect six months later, meaning compliance would kick in around mid‑2027. Enforcement will be carried out by a dedicated DMA unit inside DG Competition, which is scaling up to handle the new cloud and AI cases, hiring tech specialists and data scientists.

Practical impact on European businesses and developers

For a German automotive supplier or a French fintech start‑up, the DMA rules promise lower switching costs, better cross‑cloud portability, and the freedom to negotiate better prices. “Today, if you have a multi‑year Azure commitment with Microsoft software discounts, walking away means repurchasing licences at full price and rearchitecting your entire data layer,” said Lars Bauer, CTO of a mid‑sized logistics firm in Hamburg. “The DMA says that’s illegal. We can finally pull out without being punished.”

AI developers stand to gain the most. The ability to train a model on AWS and fine‑tune it on a competitor’s cloud, or to use OpenAI’s models while hosting inference on S3 without extra charges, could spark an explosion of cross‑platform AI tools. However, some experts warn that the compliance burden might raise the base cost of cloud services in Europe, at least initially, as providers invest in new interoperability layers and compliance teams.

Broader implications: A blueprint for global regulation?

The DMA has always been an exporter of ideas — Japan, South Korea, and the UK have adopted similar ex‑ante rules for digital platforms. A successful application to enterprise cloud and AI could accelerate similar efforts elsewhere. The UK’s Competition and Markets Authority, which is conducting its own cloud market investigation, has been closely coordinating with Brussels. A CMA spokesperson said the EU move “aligns with our emerging thinking on the need for pro‑competition interventions in cloud services.”

Wall Street analysts are already recalculating. Goldman Sachs issued a note saying that while AWS and Azure margins in Europe could compress by 200‑300 basis points under DMA compliance, the long‑term market size might grow as more reluctant enterprises adopt cloud, now that lock‑in fears are addressed. “It’s not a zero‑sum game,” the note said. “More open clouds could expand the total addressable market.”

Challenges and loopholes to watch

Sceptics point to practical hurdles. Defining what counts as a “core platform service” in the cloud is tricky: is it IaaS, PaaS, the AI developer suite, or all of the above? Amazon might argue that its AI services are not a separate “core platform” but ancillary to compute, while the Commission sees them as a powerful attractor. Similar battles over platform definitions have delayed enforcement in the first DMA cases.

There is also the risk of “creative compliance” — for instance, by geographically fencing AI services so that EU‑based customers are automatically opted into an “open” tier, while global clients stay in the old locked model. Commission officials say they are alert to such circumventions and have the power to demand real, functional separation.

Final word

June 25, 2026, will be remembered as the day Europe decided to treat the cloud and AI backbone of the internet like the utility it has become. For AWS and Azure, the DMA designation is not an indictment of illegal conduct — that’s for traditional antitrust cases — but a structural conclusion that their central role in the digital economy requires upfront rules to keep markets open. The real test will be whether those rules unlock a genuinely multi‑cloud, multi‑AI Europe or simply add a layer of compliance theatre. As the consultation begins, businesses, rivals, and regulators alike will be poring over the details, knowing that the blueprint drawn here will shape cloud and AI governance for a generation.