The European Commission has launched three separate market investigations into cloud computing under the Digital Markets Act (DMA), zeroing in on whether Amazon Web Services (AWS) and Microsoft Azure should be designated as “gatekeeper” platforms and forced to comply with a fresh set of competition obligations. The probes, opened on November 18, 2025, mark the most aggressive regulatory move yet to tackle perceived digital dominance in the infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) markets, and they could fundamentally reshape how cloud services are bought, sold, and managed across the European Union.

The DMA, which entered into force in 2022 and became fully applicable in early 2024, already designates several tech giants — including Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft — as gatekeepers for certain core platform services such as search engines, social networks, and operating systems. However, cloud computing was not included in the initial round of designations. Now, the Commission is turning its attention to the cloud, where AWS and Azure jointly command more than 50% of the global market, and an even larger share in Europe.

Why Cloud? A $300 Billion Market Under the Microscope

Cloud computing is no longer a niche enterprise IT play. It underpins everything from streaming services to artificial intelligence workloads, government digital transformation, and critical infrastructure. Global spending on public cloud services is projected to exceed $300 billion in 2025, and the EU market alone is estimated at over €90 billion. With such scale comes acute dependence: millions of businesses, startups, and public bodies run their operations on AWS or Azure. That dependence, EU regulators argue, creates a perfect storm for unfair business practices and vendor lock-in.

The Commission’s decision to open market investigations — rather than immediately designating the two firms under the DMA’s quantitative thresholds — signals that the probe goes beyond mere revenue and user counts. Under the DMA, a company can be designated as a gatekeeper if it meets certain size criteria: annual EU turnover of at least €7.5 billion or a market capitalization of €75 billion, and a core platform service with more than 45 million monthly active end users and 10,000 yearly business users. While both AWS and Azure easily clear these financial and user thresholds for their overall corporate parents (Amazon and Microsoft), the question is whether cloud computing itself constitutes a core platform service under the DMA, and whether these companies serve as an important gateway for business users to reach end users.

Gatekeeper Rules: Beyond the Quantitative Thresholds

The DMA allows the Commission to designate gatekeepers on qualitative grounds even if the quantitative thresholds are not met, through a market investigation. This appears to be the path the EU is now taking with AWS and Azure. The probes will examine the structure of the cloud market, barriers to entry, and the degree to which users are locked into a single provider. The Commission also has the power to impose remedies if it finds a company is likely to meet the thresholds in the near future — a “future-proofing” clause designed to catch fast-growing digital markets before they tip irreversibly.

European Competition Commissioner Margrethe Vestager has long signalled her intent to tackle cloud lock-in. In a 2023 speech, she noted that “cloud services have become essential to the European economy, but we see worrying signs of customer lock-in and prohibitive switching costs.” The newly opened investigations are the concrete follow-up to those warnings.

What Are the Allegations? Switching Costs, Egress Fees, and Technical Lock-in

While the full scope of the investigation remains confidential, the Commission’s initial market analysis points to several areas of concern:

  • Data egress and transfer fees: Both AWS and Azure charge customers to move their data out of the cloud environment. These fees can reach tens of thousands of euros for large datasets, effectively penalising companies that want to adopt a multi-cloud strategy or switch providers.
  • Proprietary technologies and APIs: Cloud providers build proprietary libraries, APIs, and AI/ML services that are tightly integrated into their ecosystems. Once a company builds its applications around these tools, migrating to a competitor becomes a costly, multi-year re-engineering project.
  • Bundling and tying: Both companies are known to offer attractive discounts when customers use multiple services from the same provider, and they may restrict interoperability with third-party tools. In the enterprise software space, Microsoft’s bundling of Azure with Office 365, Dynamics, and Windows-as-a-service has drawn particular antitrust scrutiny.
  • Marketplace terms and conditions: The investigation will also analyse whether the cloud platforms impose unfair terms on independent software vendors (ISVs) and resellers, potentially stifling competition from alternative cloud-native services.

These practices, the Commission suspects, result in a market where it is exceedingly difficult for rival cloud providers — such as Google Cloud, OVHcloud, Deutsche Telekom, or other European champions — to grow beyond niche status. In 2024, the French cloud provider OVHcloud filed a complaint with the EU alleging abuse of dominance by Microsoft through restrictive licensing practices for its enterprise software when used on non‑Azure clouds.

What Gatekeeper Designation Would Mean for AWS and Azure

If the probes conclude that AWS and Azure should be designated as DMA gatekeepers for cloud computing, they would be subject to a list of do’s and don’ts that go far beyond general competition law. Among the most impactful obligations:

  • Data portability obligations: The companies would be required to make it technically and contractually easy for commercial customers to move their data to another provider, at no extra cost and in real time.
  • Interoperability mandates: They would have to provide documentation, APIs, and tools to enable seamless interoperability with third-party cloud services, and refrain from using technical measures to impede switching.
  • Anti‑bundling rules: The gatekeepers would be barred from requiring users to sign up for additional services as a condition for accessing the core cloud platform, and from self‑preferencing their own ancillary services.
  • Transparency requirements: They would need to publish clear, granular information on pricing, service‑level agreements, and migration processes.
  • Prohibition on unfair data use: They could not use business users’ proprietary data to compete against those same users — for instance, by analysing customer workloads to develop competing AI models or services.

Non‑compliance could result in fines of up to 10% of global annual turnover, or up to 20% for repeated infringements. For Amazon, with 2024 global revenues of approximately $574 billion, a 10% penalty would equal roughly $57 billion — a figure large enough to concentrate any boardroom’s mind.

Amazon and Microsoft Respond: A Tale of Two Defences

Neither company has viewed the DMA’s expansion into cloud with enthusiasm. Amazon has consistently argued that the cloud market is highly dynamic and competitive, pointing to the rapid innovation and price wars that have characterised the sector for over a decade. An AWS spokesperson said in a statement: “Cloud computing has been one of the most innovative and fastest‑growing technology markets in history. We compete vigorously on price, performance, and security, and customers benefit from a wide range of choices. We will cooperate fully with the Commission’s investigation and are confident that the facts will demonstrate a thriving, competitive market.”

Microsoft, on the other hand, has been more conciliatory, partly because it has already been through a series of EU antitrust battles. Having escaped a DMA‑style designation for its Bing and Edge services only by making voluntary commitments, Microsoft may be positioning itself as a cooperative partner. A Microsoft spokesperson said: “We believe that cloud services are subject to intense competition and that European businesses have many options. We are committed to engaging constructively with the European Commission throughout this process and to supporting a regulatory framework that ensures fair and open cloud markets.” Behind the scenes, however, the company knows that its licensing practices for SQL Server, Windows Server, and other enterprise products when run on rival clouds are likely to face harsh scrutiny.

The Broader Impact on European Cloud Users and Startups

For European businesses, the stakes of this investigation are enormous. If the Commission ultimately imposes interoperability and portability obligations, enterprises could finally break free of single‑vendor dependency. Multi‑cloud strategies, which today are more aspiration than reality for most mid‑sized firms, could become a straightforward architectural choice. This would, in turn, pressure the hyperscalers to compete more on price, service quality, and innovation rather than on the stickiness of their proprietary ecosystems.

The startup community is watching closely as well. Young cloud‑native companies often cannot afford to replicate the full stack of services offered by AWS or Azure. If they are forced to build on open standards that allow seamless migration, their cost of doing business drops dramatically. European cloud providers like Scaleway, UpCloud, and Elastx could see a surge in demand if switching becomes frictionless.

However, some industry observers warn that overly aggressive regulation could slow down the innovation flywheel that cloud hyperscalers have perfected. The fear: complex interoperability requirements could divert engineering resources away from developing new features, ultimately harming the user experience. “We need to strike a balance,” said Jan Müntefering, a partner at a Brussels‑based antitrust practice. “The DMA’s goal is to open markets, not to micromanage product road‑maps.”

The DMA’s Expanding Reach: From Search Engines to the Cloud

These cloud probes represent a significant expansion of the DMA’s remit. Originally conceived to rein in the dominance of consumer‑facing platforms like Google Search, Apple’s App Store, and Meta’s social networks, the Act is now reaching into deep enterprise infrastructure. This evolution is entirely intentional: the legislation was drafted with a broad definition of “core platform service” that can be updated as digital markets evolve. Cloud computing, along with virtual assistants, IoT platforms, and online advertising intermediaries, were always on the list of services that could be added via market investigation.

The EU’s move also places it ahead of other jurisdictions. The United States has yet to pass comprehensive digital antitrust legislation at the federal level, although the Department of Justice and Federal Trade Commission have filed separate antitrust suits against Amazon, Microsoft, and Google. The UK’s Digital Markets Unit, operating under the new Digital Markets, Competition and Consumers Act, may follow the EU’s lead and open its own cloud investigation in 2026.

What Happens Next: A Long Regulatory Road

Market investigations under the DMA typically take between 12 and 18 months to complete, though they can be extended. The Commission will now issue requests for information to AWS, Microsoft, their customers, and competitors. It will also gather data from market studies, technical assessments, and third‑party complaints. A preliminary view is likely to be published in mid‑2026, followed by a comment period and a final decision in late 2026 or early 2027.

If AWS and Azure are designated as gatekeepers, they will have six months to comply with the DMA obligations for the designated services. Both companies will almost certainly appeal any adverse decision to the General Court of the European Union, potentially delaying implementation for years. Nevertheless, the opening of investigations itself signals to the market that change is coming, and cloud providers may begin to voluntarily adjust their practices to pre‑empt regulation.

A Pivotal Moment for Cloud Competition

The European Commission’s decision to probe AWS and Azure under the DMA is far more than a regulatory formality. It is an assertion that the foundational infrastructure of the digital economy — the cloud — must be subject to the same openness and fairness rules as consumer internet platforms. For too long, the narrative of swift innovation has masked a more uncomfortable reality: that a handful of American hyperscalers control the invisible plumbing on which European industry increasingly depends. Whether the DMA can successfully uncork that monopoly remains to be seen, but with a potential €50 billion fine hanging over their heads, Amazon and Microsoft will be forced to take the investigation very seriously indeed. The outcome will not only redefine the European cloud market but could also set a global benchmark for cloud regulation.