The European Commission has launched an investigation into whether U.S. tech giants Amazon (AMZN) and Microsoft (MSFT) are cloud computing ‘gatekeepers’ and as such should adhere to its digital rules.
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The probe will assess whether Amazon is the gatekeeper of Amazon Web Services and Microsoft for Microsoft Azure between businesses and consumers.
Full Compliance
Should the commission conclude, after a 12-month investigation, that Microsoft and Amazon meet the criteria to be designated as gatekeepers for their cloud computing services under the Digital Markets Act (DMA), Amazon and Microsoft would have six months to ensure full compliance.
“The DMA intends to ensure contestable and fair markets in the digital sector. It identifies large digital platforms, or ‘gatekeepers’, that provide an important gateway between businesses and users, imposing obligations and banning certain unfair practices,” the commission said.
Henna Virkkunen, Executive Vice-President for Tech Sovereignty, Security and Democracy, added: “Cloud computing services power Europe’s digital future – enabling AI development and driving innovation. Such services should be offered in a fair, open and competitive environment that fosters trust and secures Europe’s tech sovereignty. We want to ensure an effective application of the Digital Markets Act in cloud computing services.”
Potential Fines
Companies labeled as gatekeepers will be required to make their services interoperate with rivals and are not allowed to favor their own services over rivals. Companies can be fined up to 10% of annual global turnover for DMA violations.
While a Microsoft spokesperson said the company was ready to contribute to the inquiry, an AWS spokesperson said “designating cloud providers as gatekeepers isn’t worth the risks of stifling invention or raising costs for European companies.”
The probe comes as tensions between Europe and President Trump remain elevated over the future of digital technology, AI and the power of U.S. firms delivering these services on the continent.
Amazon shares were down around 1% in pre-market trading, with Microsoft off by a similar amount. However, as seen above, both firms have performed strongly so far this year.
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