Europe's DMA Reaches Into the Cloud
On June 25, 2026, the European Commission — supported by the Netherlands' Authority for Consumers and Markets (ACM) in a formal joint investigative team — informed Amazon and Microsoft that their cloud services should be designated as gatekeepers under the Digital Markets Act. The provisional position covers Amazon Web Services, the EU's largest cloud provider, and Microsoft Azure, the second largest. It marks the DMA's first extension into infrastructure-layer cloud computing, and the ACM's first major DMA co-enforcement outcome.
The designation proceedings were opened on November 18, 2025. What makes the June 25 announcement legally significant is the route taken: neither AWS nor Azure meets the DMA's quantitative revenue and user thresholds that trigger automatic gatekeeper scrutiny. Instead, the Commission invoked Article 3(8), which permits qualitative designation when a provider "has a significant impact on the internal market" and holds an "entrenched and durable" gateway position. This is the first time Article 3(8) has been applied to cloud infrastructure.
Lock-In and the AI Amplifier
The Commission's preliminary findings center on two structural problems. First, both platforms exhibit "lock-in effects and high switching costs." Cloud customers who have built applications around proprietary APIs, embedded storage, and integrated data pipelines face substantial costs — technical, financial, and operational — when attempting to migrate. High egress fees paired with effectively free ingress entrench this dependency at a structural level.
Second, and more novel, is the AI argument. The Commission found that AWS and Azure's artificial intelligence tool portfolios "have become a decisive factor in cloud procurement." As enterprises build generative AI workloads around provider-specific model services — Azure via its Microsoft-OpenAI partnership, AWS via its Bedrock platform — they anchor to a cloud ecosystem more deeply than prior infrastructure choices allowed. The Commission's view is that AI entrenchment accelerates and amplifies existing lock-in, converting competitive procurement choices into structural capture.
"Cloud services have become a cornerstone of Europe's economy," said Executive Vice-President Henna Virkkunen, "with over half of EU businesses now relying on them." EVP Teresa Ribera added that ensuring "a well-functioning" competitive cloud market was essential as the sector expands. Taken together, these statements frame the intervention not as a market correction but as infrastructure policy.
The Strongest Case For Intervention
Before weighing the costs, the competition rationale deserves honest consideration. If AI development concentrates on a handful of platforms that are structurally costly to exit, competitive markets for downstream AI applications become contingent on how those infrastructure owners behave. Lock-in at the platform layer can foreclose competition several markets removed — precisely the scenario the DMA's ex-ante framework was designed to prevent, before foreclosure is complete. From that logic, the cloud extension is coherent, not overreach.
The Innovation Concern
Microsoft and Amazon each responded swiftly. Microsoft described the European cloud sector as "innovative, highly competitive," pointing to Google Cloud as a direct rival. AWS argued the Commission's findings "disregard the breadth of cloud services available" and risk deterring infrastructure investment at a critical juncture.
The legitimate concern here is calibration. The DMA obligations applicable to cloud gatekeepers — interoperability, data portability, restrictions on self-preferencing — are more technically demanding at the infrastructure layer than for consumer-facing platforms. Genuine cloud interoperability requires sustained engineering investment and introduces security complexity if designed hastily. The six-month compliance window post-designation may underestimate the implementation challenge.
The contrast with the UK's Competition and Markets Authority is instructive. The CMA completed its own cloud market review and, in March 2026, accepted voluntary commitments from providers rather than imposing binding rules — betting that negotiated behavioral changes on egress fees and switching credits could deliver competitive outcomes with less regulatory friction than mandatory designation.
ACM's Role and What Comes Next
For the Netherlands' ACM, this investigation is a landmark: its first major DMA co-enforcement outcome. Under DMA architecture, the Commission holds exclusive enforcement authority over gatekeeper obligations, but national competition authorities participate through joint investigative teams, pooling specialized expertise without fragmenting jurisdiction. The Netherlands brings relevant depth here: the country hosts major data center infrastructure for all three leading hyperscalers and has tracked cloud market dynamics closely through its own competition research.
Amazon and Microsoft now have the right of defense before any final decision. The Commission's final determination is expected by late October 2026. If designation is confirmed, companies have six months to comply; non-compliance carries fines of up to 10 percent of global annual turnover.
A companion market investigation — examining whether existing DMA obligations adequately address cloud-specific harms such as conditioned data access, interoperability obstacles, and service tying — is expected to conclude by May 2027 and could prompt revisions to the DMA's obligations list itself.
The practical significance of the ruling will hinge on what compliance actually looks like. If gatekeeper status produces genuine, low-friction switching options and meaningful API interoperability, the intervention achieves its stated aim. If it yields technically compliant but operationally hollow remedies, the process will have added cost without adding contestability. That outcome rests as much with how Amazon and Microsoft design their compliance programs as with how the Commission drafts its final decision.