AWS and Microsoft Azure Designated EU Gatekeepers Under Digital Markets Act

The European Commission (EC) issued a preliminary finding on June 25 designating Amazon Web Services and Microsoft Azure as gatekeepers under the Digital Markets Act. The ruling targets the two largest cloud providers for regulation despite neither meeting the DMA's standard quantitative thresholds for such designation.

The EC acknowledged the companies fell short of the DMA's revenue and user count benchmarks but argued their operational capacity, investments, and entrenched user bases have significantly outpaced competitors. The commission noted that both platforms benefit from lock-in effects and high switching costs for customers.

AI Services as a Decisive Factor in Cloud Procurement

The EC stated that artificial intelligence has become a decisive factor in cloud procurement. AWS and Azure retain a large proportion of increased AI-driven demand within their respective ecosystems, further entrenching their market positions. The commission described the two as holding an entrenched and durable position in the EU market.

Key findings from the EC's investigation include:

• AWS and Azure have achieved significant turnover even below quantitative thresholds.
• Their operational capacity and investments have outpaced competitors.
• Both platforms have vast and entrenched user bases.
• Customers face lock-in effects and high switching costs.
• AI offerings drive cloud procurement and are kept within each ecosystem.

Reaction and Next Steps from Industry and Regulators

The preliminary decision opens a consultation period. Amazon and Microsoft can review and respond in writing. An AWS spokesperson said the EC's findings disregard the breadth of cloud services available and risk deterring European investment and innovation. The spokesperson argued that AWS faces healthy competition with more choice, lower prices, and greater flexibility than ever before, and that overlapping DMA regulation would undermine European competitiveness.

The EC launched its investigation into cloud service providers in November 2025 with a focus on Microsoft and Amazon. The commission stated that over half of EU businesses now rely on cloud services, which have become a cornerstone of Europe's economy and a prerequisite for AI. Henna Virkkunen, EVP for tech sovereignty, security, and democracy, said cloud services must operate in fair and open markets. The final designation could impose obligations on AWS and Azure regarding data portability, interoperability, and fairness in their platform operations.