European regulators opened two new fronts against Microsoft in late June 2026, with Brussels and Rome launching separate investigations into the company’s cloud dominance and artificial intelligence bundling practices. On June 25, the European Commission signaled that Microsoft Azure could be designated as a gatekeeper under the Digital Markets Act (DMA), a move that would impose strict new obligations on the cloud platform. One day later, on June 26, Italy’s competition authority — the Autorità Garante della Concorrenza e del Mercato (AGCM) — announced it was probing Microsoft’s pricing and bundling of its AI assistant, Copilot, within Microsoft 365 subscriptions. The twin actions mark a significant escalation in regulatory pressure on the Redmond giant and could reshape how it sells cloud services and AI-powered productivity tools across Europe.
Azure Under the DMA Microscope
The DMA, which came into force in 2023, empowers the European Commission to designate large digital platforms as gatekeepers if they provide a core platform service, serve as an important gateway for business users to reach end users, and enjoy an entrenched and durable position. Once designated, gatekeepers must comply with a list of obligations — such as allowing interoperability, refraining from self-preferencing, and ensuring data portability. Non-compliance can result in fines of up to 10% of global annual turnover, or 20% for repeat offenses.
Azure is Microsoft’s second-largest revenue driver after Office 365 and is a foundational component of the company’s enterprise strategy. The Commission’s preliminary view that Azure may meet the gatekeeper thresholds focuses on its dominance in cloud computing, particularly in the European market where it competes with Amazon Web Services (AWS) and Google Cloud. If Azure is formally designated, Microsoft would be forced to open its platform more broadly: rivals could demand fair access to Azure’s ecosystem, and customers could gain the right to move their data and workloads between clouds without penalty or technical barriers.
This is not the first time Azure has drawn regulatory heat. In 2022, Microsoft changed its outsourcing and hosting terms after complaints from European cloud providers that its licensing practices unfairly locked customers into Azure. The DMA designation would go much further, potentially requiring Microsoft to dismantle technical and contractual ties that privilege its own services, such as deeply integrated AI tools, analytics, and security features.
For Windows enthusiasts and enterprise IT admins, a gatekeeper designation on Azure could remake the cloud landscape. It might force Microsoft to offer Azure services on more equal terms, spurring innovation and price competition. On the flip side, tight integration between Azure and on-premises Windows Server environments could be disrupted, complicating hybrid deployments.
Italy Targets Microsoft 365 Copilot
The AGCM’s probe into Microsoft 365 Copilot focuses on concerns that Microsoft is leveraging its dominance in office productivity software to stifle competition in the nascent AI assistant market. Copilot, launched in 2023 for enterprises and later expanded to consumers, integrates generative AI deeply into Word, Excel, PowerPoint, Outlook, and Teams. It commands a premium price — typically $30 per user per month on top of existing Microsoft 365 subscriptions — and is increasingly bundled with higher-tier plans. Competitors like Google’s Duet AI and independent startups argue that Microsoft’s control over the underlying productivity suite gives it an unfair advantage in distributing and pricing its AI tools.
Italy’s investigation will examine whether Microsoft imposes unfair bundling or pricing conditions that coerce enterprise customers into adopting Copilot. If a company wants the latest Office features or security updates, does it have to swallow Copilot as well? Are discounts structured to make standalone alternatives economically unviable? The AGCM has a history of taking tough lines on tech giants; in 2021, it fined Google over €100 million for blocking an electric vehicle charging app from Android Auto.
A key issue is data. Copilot learns from an organization’s own documents, emails, and meetings to provide contextual assistance, creating a powerful moat of proprietary data that gets stronger with each additional user. This data advantage could constitute an insurmountable barrier for competitors, especially if Microsoft ties it to the ubiquitous Office suite. The Italian probe may serve as a bellwether for similar investigations elsewhere in the EU.
A Pattern of EU Pressure
The dual actions of June 2026 fit a long pattern of European regulatory challenges for Microsoft. From the landmark browser choice ruling in 2009 to the more recent scrutiny of Teams bundling, Brussels has repeatedly targeted what it sees as anticompetitive bundling and self-preferencing. The DMA itself was partly inspired by the limitations of traditional antitrust enforcement against digital giants. By moving preemptively — designating gatekeepers before abuses may fully manifest — the Commission hopes to prevent markets from tipping irreversibly.
Italy’s solo move also highlights the growing activism of national competition authorities under the DMA’s umbrella. While the DMA centralizes gatekeeper designation in Brussels, it does not preempt member states from pursuing parallel or complementary cases under their own laws. The Italian probe may be the first of many country-level actions focused on AI and cloud markets.
Lessons from the past loom large. Microsoft’s bundling of Internet Explorer with Windows nearly led to the company’s breakup in the early 2000s. The European Commission ultimately forced a browser ballot screen, a mild remedy that critics say did little to restore competition. With the DMA, the EU now has sharper tools at its disposal, including the ability to force functional separation of businesses or even ban certain behaviors outright.
What This Means for the Windows Ecosystem
For the millions of businesses and developers who build on Windows and Azure, the regulatory actions introduce both opportunities and uncertainty. If Azure is forced to open up, software vendors might find it easier to offer multi-cloud solutions without incurring high egress fees or rearchitecting for Azure-specific services. Developers writing Windows applications could gain more freedom to choose backend clouds without losing Microsoft’s first-party support.
On the productivity front, a ruling against Copilot bundling could unbundle AI features from Microsoft 365, leading to more flexible and potentially lower-cost options. Large enterprises that resented the forced march toward AI subscriptions would welcome the change, as would a cottage industry of AI startups seeking to sell their own assistants as Microsoft 365 add-ins. However, Windows users who enjoy the seamless Copilot integration — with the assistant baked into the taskbar, Edge, and Office — might see fragmentation or delays in feature rollouts if Microsoft is forced to decouple its services.
Microsoft’s response will be critical. Historically, the company has preferred to settle rather than endure protracted legal battles, and it has proven adept at making just enough licensing tweaks to satisfy regulators while preserving its competitive moat. With AI and cloud now central to its growth strategy, Microsoft may opt to fight certain demands more vigorously — especially any that threaten the data flywheels between Windows, Azure, and Microsoft 365.
The Road Ahead
Formal gatekeeper designations under the DMA follow a consultative process; the Commission’s statement on June 25 is likely an opening designation letter that triggers a six-month investigation, during which Microsoft can contest the findings. If Azure is designated, compliance would be required within six months. That timeline puts a potential late 2027 compliance date on the calendar, but legal challenges could drag on longer.
The Italian AGCM probe is expected to conclude within a year but could lead to interim measures much sooner. The authority has the power to impose fines and order behavioral or structural changes. Given the rapidly evolving AI market, speed may be of the essence to prevent irreversible tipping.
Both probes send an unmistakable message: the era of unchecked expansion for big tech’s cloud and AI services in Europe is over. For Windows users and the broader tech community, the outcome will define the next era of digital competition — and whether the integrated visions of tech giants can survive the EU’s passion for interoperability and fair markets. Microsoft, which has navigated European regulatory storms for decades, faces one of its most consequential challenges yet.