The European Commission ignited a fresh regulatory battle on June 25, 2026, by issuing preliminary findings that Amazon Web Services (AWS) and Microsoft Azure should be designated as gatekeepers under the Digital Markets Act (DMA). The announcement sent ripples through the cloud computing industry, marking the first time that cloud infrastructure services have been targeted under the bloc’s landmark competition rules.
What the Digital Markets Act Means for Cloud
The DMA, which came into force in 2022, aims to curb the dominance of large online platforms—so-called gatekeepers—that control critical digital gateways. Companies meeting specific thresholds for market capitalization, user base, and entrenched position can be designated, subjecting them to a list of strict do’s and don’ts. Until now, the Commission has designated gatekeepers in areas like search engines, social networks, and operating systems. Extending the DMA to cloud infrastructure providers signals a significant expansion of the regulation’s scope.
The Commission’s preliminary assessment found that AWS and Azure hold a durable and entrenched position in the EU cloud market, acting as important gateways for businesses to reach customers. Their market share, combined with high switching costs and the widespread use of their proprietary ecosystems, created conditions that warranted gatekeeper designation.
The Designation Process
The preliminary finding is not a final decision. AWS and Microsoft now have the opportunity to respond, presenting counterarguments and evidence. The DMA allows designated companies to challenge the Commission’s assessment before the formal designation is issued. In previous cases, some firms have successfully argued against gatekeeper status for certain services, while others have accepted the label and adapted their practices.
If the preliminary view is confirmed, AWS and Azure would likely have to comply with obligations such as ensuring interoperability with third-party services, allowing business users to access data they generate on the platform, and refraining from self-preferencing their own services over those of rivals. The Commission could impose fines of up to 10% of global annual turnover for non-compliance, and up to 20% for repeated infringements.
Why Cloud Services Now?
The Commission’s move comes amid growing complaints from European cloud providers and business customers about alleged anti-competitive practices by the two US tech giants. Critics point to bundled pricing, egress fees that make it costly to move data out of the cloud, and technical lock-in mechanisms. Smaller rivals argue that these practices stifle competition and innovation, keeping customers tied to AWS or Azure even when better alternatives exist.
EU competition chief Margrethe Vestager has long signalled that cloud computing was on the DMA radar. In speeches throughout 2025, she highlighted the strategic importance of cloud infrastructure for Europe’s digital sovereignty and the need to ensure fair competition. The preliminary finding on June 25 puts those warnings into action.
Microsoft in the Crosshairs
For Microsoft, a DMA gatekeeper designation for Azure adds another layer of regulatory scrutiny. The company has already navigated DMA compliance for Windows and LinkedIn, and it has been in the spotlight over software bundling and licensing practices. A gatekeeper label for Azure would force Microsoft to open up its cloud platform more aggressively, potentially altering its commercial model.
Microsoft has consistently argued that the cloud market is highly competitive, pointing to the presence of other strong players like Google Cloud and European providers such as OVHcloud and Deutsche Telekom. The company is expected to contest the Commission’s preliminary view vigorously. In a statement released shortly after the announcement, a Microsoft spokesperson said, “We disagree with the preliminary findings and will continue to engage constructively with the Commission to demonstrate the vibrant competition in the cloud market and the choice available to European businesses.”
AWS Faces Regulatory Headwinds
Amazon, the dominant force in cloud infrastructure, has long denied any gatekeeping role. AWS maintains that its customers freely choose its services based on innovation, security, and scale, and that switching costs are lower than critics claim. The Commission’s preliminary finding challenges that narrative directly.
An AWS representative responded: “AWS is one of many cloud providers operating in the EU, and our customers have a wide array of options. We believe the DMA’s criteria are not met and will work to show the Commission that our services foster competition, not hinder it.”
Impact on the Cloud Market
If the designations are finalized, the immediate effect would be a wave of technical and contractual changes from both providers. Customers could benefit from easier migration between clouds, lower data transfer costs, and the ability to use multiple cloud providers without penalty. This multi-cloud flexibility has been a long-standing demand from EU business groups and public sector organizations.
However, some experts warn that heavy-handed regulation could have unintended consequences. Georgina Haynes, a cloud economist at Bruegel, noted: “While the aim is to open the market, strict interoperability requirements could force platform standardization that actually reduces differentiation and innovation. The Commission must carefully tailor remedies to avoid stifling the technical diversity that makes cloud services valuable.”
Broader EU Tech Regulation Context
The preliminary finding fits into a broader EU drive to regulate digital markets more tightly. Alongside the DMA, the EU has implemented the Digital Services Act (DSA), the Data Act, and sector-specific rules for AI. The bloc’s approach to cloud computing also dovetails with initiatives like Gaia-X, the European project to build a federated data infrastructure that reduces dependence on non-European providers.
The Commission’s move may encourage other jurisdictions to examine cloud concentration. Regulators in the United Kingdom and Japan have already initiated market studies into cloud services, and the US Federal Trade Commission has been investigating cloud business practices. The EU’s DMA designation could set a precedent that shapes global antitrust action.
What’s Next?
AWS and Microsoft will now engage in a dialogue with the Commission over the coming months. They can challenge both the factual basis of the preliminary findings and the definition of what constitutes their core platform services. The DMA allows for a back-and-forth before any final decision, which could take up to a year. Stakeholders, including competitors, business users, and consumer groups, will be invited to submit their views during a public consultation.
If the Commission ultimately designates AWS and Azure as gatekeepers, the companies will have six months to comply with the DMA’s obligations. That could trigger a fundamental redesign of their cloud service architectures in Europe. Some analysts predict that Microsoft and Amazon might choose to create separate EU-specific offerings that meet DMA requirements while leaving their global platforms unchanged.
Market Reaction
Investor reaction to the preliminary finding was muted. Amazon and Microsoft shares dipped slightly in after-hours trading but remained within their recent ranges. Analysts noted that the market had long anticipated regulatory action on cloud infrastructure, and the preliminary nature of the finding left room for negotiation.
Cloud customers, however, are already planning for a potential shift. Several large European enterprises confirmed they are accelerating multi-cloud strategies to reduce dependence on any single provider. “This is the wake-up call we needed,” said Jürgen Meier, CTO of a major German manufacturing firm. “We’ve been locked into Azure for critical workloads, and the DMA’s interoperability rules could be a game changer.”
Beyond AWS and Azure
Though the focus is currently on Amazon and Microsoft, Google Cloud Platform (GCP) also remains under the Commission’s watchful eye. While not part of the June 25 preliminary findings, GCP could face similar scrutiny if its market share in the EU grows or if its practices draw complaints. Google has avoided the gatekeeper spotlight so far by emphasizing integrations and open-source tools, but that may not insulate it indefinitely.
Smaller European cloud providers have applauded the Commission’s action. The Cloud Infrastructure Services Providers in Europe (CISPE) coalition, which includes AWS and several smaller players, had previously voiced concerns about software licensing practices but had not explicitly called for DMA designation. Following the announcement, CISPE said it welcomed “any effort to ensure a level playing field” but cautioned that remedies must be proportionate and evidence-based.
The Long Road Ahead
The DMA’s application to cloud infrastructure is uncharted territory. Unlike online marketplaces or search engines, cloud platforms underpin critical digital supply chains, and the technical nuances of enforcing interoperability and data portability are formidable. The Commission will need to work closely with industry experts and standards bodies to define what compliance looks like in practice.
Legal challenges are almost certain. Both Amazon and Microsoft have deep legal resources and a track record of fighting regulatory overreach. The preliminary finding could eventually end up in the European Court of Justice, dragging out the process for years. In the meantime, the cloud market continues to evolve at a breakneck pace, with AI integration, edge computing, and sovereign cloud offerings reshaping competitive dynamics.
Conclusion
The European Commission’s preliminary finding that AWS and Azure should be DMA gatekeepers represents a pivotal moment for the cloud industry. It underscores the EU’s determination to bring digital infrastructure under the same competition lens as consumer-facing platforms. For Microsoft and Amazon, the road ahead is fraught with compliance burdens and potential overhauls of their European operations. For businesses and cloud users, the promise of more choice and lower switching costs may finally become reality—if the regulators can strike the right balance between openness and innovation.
The coming months will reveal whether the Commission’s preliminary view hardens into a formal designation and how the tech giants adapt. One thing is certain: the era of unscrutinized cloud dominance is over.