Amazon Web Services and Microsoft Azure have been told they should be treated as gatekeepers under the European Union’s Digital Markets Act, the European Commission announced on June 25, 2026. The preliminary finding, which targets the two largest public cloud platforms by market share, sets the stage for far‑reaching regulation of cloud infrastructure services for the first time since the DMA entered into force.

The move, if confirmed after a statutory market investigation, would force AWS and Azure to comply with a strict set of pro‑competition obligations designed to loosen their grip on Europe’s cloud market. Enterprises that have long complained about egress fees, technical lock‑in, and opaque licensing practices could gain new rights to take their data and workloads elsewhere – and rivals like Google Cloud and European providers stand to benefit from a more level playing field.

A Regulator’s Warning Shot

The Commission’s statement, released mid‑morning Brussels time, said that both AWS and Azure meet the quantitative thresholds laid down in Article 3 of the DMA: an annual EU-wide turnover of at least €7.5 billion, a market capitalisation or fair market value above €75 billion, and a user base that exceeds 45 million monthly active end users and 10,000 yearly active business users. The Commission further argued that each service constitutes an “important gateway” between businesses and end users – the characteristic that triggers gatekeeper designation.

“Cloud infrastructure services have become the digital backbone of the European economy, and no business should be forced to accept unfair terms because it is too difficult to switch providers,” said Margrethe Vestager, Executive Vice‑President for a Europe fit for the Digital Age, in a press call. “Today’s preliminary finding is a first step towards ensuring that the cloud market works for everyone.”

Both Amazon and Microsoft have 45 calendar days to respond to the Commission’s objections. A formal designation decision – followed by six months to implement compliance measures – would likely land in early 2027. Failure to comply exposes the companies to fines of up to 10% of global annual turnover.

What the DMA Actually Requires

The Digital Markets Act, fully applicable since May 2023, spells out a long list of “do’s and don’ts” for designated gatekeepers. Many of those obligations, originally written with consumer platforms such as search engines and social networks in mind, translate directly into concrete cloud‑specific rules:

  • Interoperability and portability: Gatekeepers must provide technical interfaces that allow business users to export their data – and the applications built on top of it – to another provider without loss of functionality. For cloud, that implies standardised APIs for compute, storage, and identity management, making it far easier for an enterprise to lift‑and‑shift a complex SAP or Oracle estate from AWS to Azure, or vice versa.
  • No self‑preferencing: A gatekeeper cannot rank its own services higher than those of rivals. In a cloud context, this could stop Microsoft from bundling Azure credits with broader enterprise agreements in a way that makes on‑premises‑equivalent licensing more expensive unless the customer commits to Azure.
  • Fair, reasonable, and non‑discriminatory (FRAND) access: Gatekeepers must offer businesses access to their ecosystems on FRAND terms. That directly challenges the egress fees – charges to move data out of a cloud – that every major hyperscaler levies. The Commission has already signalled through the Data Act that egress fees must be abolished, but the DMA provides a sharper enforcement tool.
  • Data siloing ban: Gatekeepers cannot combine personal data from different services without consent. For hybrid‑cloud customers, that limits how Microsoft or Amazon can use telemetry data from on‑premises servers managed through cloud control planes.
  • Separation of services: The DMA can require gatekeepers to unbundle certain services. Analysts speculate that the Commission might demand that Microsoft sell Azure Log Analytics or Amazon offer CloudWatch as standalone products that work seamlessly with third‑party clouds.

The obligations are not a pick‑and‑choose menu: once designated, a gatekeeper must comply with all relevant provisions unless the Commission grants a suspension following a reasoned request.

A Market Dominated by Two

For years, the public‑cloud market in Europe has been effectively a duopoly. Synergy Research Group’s latest data shows AWS holding a 33% share in the EU‑27 plus EFTA, while Azure commands 22%. Google Cloud, in third place, lingers at 11%, with the remainder split among smaller players such as OVHcloud, Deutsche Telekom’s T‑Systems, and Oracle. That concentration has drawn the attention of national competition authorities and trade bodies such as CISPE (Cloud Infrastructure Services Providers in Europe), which has repeatedly called for regulatory intervention.

“We welcome the Commission’s decision to open this investigation. Cloud lock‑in is the single biggest barrier to digital transformation in Europe,” said a CISPE spokesperson. “Enterprises often find that the cost of switching – in money, time, and risk – is so high that they effectively have no choice but to stay with their incumbent provider.”

The lock‑in complaint is not theoretical. A survey by the FinOps Foundation found that 62% of European enterprises had wanted to move workloads between clouds in the previous year but abandoned the effort because of technical or contractual obstacles. Egress fees, which can run to over €0.09 per GB, can make a 100‑TB database migration cost €9,000 before any engineering work begins. Azure’s licensing policies, which charge extra to run Windows Server and SQL Server on rival clouds, add a further financial penalty for multi‑cloud strategies – a practice that prompted a formal complaint from Google to the European Commission in 2024.

Amazon and Microsoft Push Back

Neither company immediately issued a detailed statement, but early reactions pointed to vigorous legal challenges. Amazon has long argued that AWS is not a “core platform service” within the meaning of the DMA because it provides infrastructure, not a consumer‑facing service. A person familiar with the company’s thinking said Amazon will contest the designation by noting that the DMA’s list of core platform services – online intermediation, search engines, social networks, video‑sharing platforms, number‑independent interpersonal communications, operating systems, cloud computing, and advertising – does include “cloud computing,” but that the legislative history shows lawmakers intended to capture software‑as‑a‑service offerings such as office productivity suites, not infrastructure‑as‑a‑service.

Microsoft’s position is more nuanced. The company already cooperates closely with the Commission on the EU Data Act and has voluntarily made interoperability data available through the Azure Open Data Initiative. However, Microsoft’s general counsel is expected to argue that the DMA’s quantitative thresholds, particularly the “active business user” test, should not apply to Azure because its enterprise agreements are negotiated individually and do not constitute a “platform” in the traditional sense.

Legal experts anticipate a protracted battle. “The Commission is well aware that this will end up in the General Court,” said Dr. Annette Linder, a competition law professor at the College of Europe. “But it has chosen to pick this fight now because the cloud market is consolidating faster than ever, and waiting would only entrench the incumbents further.”

What Changes for CIOs and IT Buyers

If the designations are upheld, enterprise technology leaders will feel the practical impact within months. The most immediate effect will be on contract negotiations. A designated gatekeeper must offer access on FRAND terms, which means that CIOs can demand transparent, documented pricing models that do not bundle unavoidable lock‑in features. The days of “sign a three‑year enterprise agreement and get a 30% discount” may be numbered if that discount is contingent on exclusive use of one cloud.

Data portability will become a procurement weapon. A financial services firm, for example, could ask a cloud provider to demonstrate, in a test environment, that a 50‑TB SAP HANA database can be migrated to a competitor within 30 days. If the provider cannot meet that benchmark, the customer could argue that the gatekeeper is failing its DMA obligation, potentially triggering a complaint to the Commission.

Egress fees, already on the retreat since Google and AWS announced partial waivers in 2024, will almost certainly disappear entirely for designated gatekeepers. The DMA’s ban on unfair trading conditions would render any data transfer charge above the underlying network cost prima facie unfair. Enterprise architects who have held back latency‑sensitive workloads from a multi‑cloud strategy for fear of rising egress bills can start drawing up new reference architectures.

Software licensing will be another battleground. Microsoft’s practice of charging more for Windows Server licences when they are run on Google Cloud or AWS – up to five times the price of the Azure‑hosted equivalent – directly conflicts with the DMA’s anti‑self‑preferencing rule. A similar logic applies to Amazon’s AWS Graviton chips: custom silicon that delivers better price‑performance is permissible, but tying software licences or support contracts to Graviton‑based instances in a way that prevents a customer from recreating the same environment on another cloud would be problematic.

Wider Industry Ramifications

For cloud rivals, the DMA’s extension to infrastructure could be a lifeline. Google Cloud, which has invested heavily in Anthos and BigLake to differentiate on open‑source compatibility, would become the immediate beneficiary of any forced unbundling. European champions such as OVHcloud and Deutsche Telekom’s Open Telekom Cloud could finally compete on a merits basis instead of losing deals simply because a customer already owns Microsoft 365 and feels compelled to use Azure for directory synchronisation.

The open‑source ecosystem also gains. CNCF (Cloud Native Computing Foundation) projects like Kubernetes have already become the de facto standard for container orchestration, but proprietary APIs for logging, monitoring, and IAM (identity and access management) still create “soft” lock‑in. If gatekeepers are required to provide documented, interoperable interfaces for these ancillary services, the likes of Prometheus, Grafana, and Keycloak could see accelerated enterprise adoption.

At the same time, compliance costs will rise. Anyone who has sat through a product security review knows that every new regulatory obligation adds engineering and legal overhead. Smaller cloud providers worry that the DMA’s requirements, while aimed at the hyperscalers, will trickle down through supply‑chain pressure. “Our customers will start asking for the same swat‑level policies that AWS has to provide, and we cannot absorb that cost,” said the CTO of a mid‑tier European managed‑service provider who asked not to be named.

The Political Dimension

The designation of AWS and Azure under the DMA is not happening in a vacuum. It comes three years after the EU introduced the Data Act, which already mandates switching safeguards, and just weeks after the US‑EU Trade and Technology Council meeting in Leuven, where data localisation and cloud sovereignty topped the agenda. By moving against two American cloud giants, the Commission is signalling that Europe is prepared to use its regulatory muscle even when it stirs transatlantic tensions.

Washington’s reaction will be watched closely. The last time a major US tech company was designated under the DMA – Apple with iOS and its App Store – the company’s CEO described the rules as “a weapon to extract money from American innovators.” AWS and Microsoft, which together earn an estimated €25 billion from EU‑based customers, have substantial lobbying resources in Brussels and Washington. Trade associations such as ITI (Information Technology Industry Council) have already warned that designating cloud services as gatekeepers could “fragment the global internet architecture.”

What Happens Next

The Commission’s procedural roadmap is clear. Over the next 45 working days, Amazon and Microsoft can present evidence to rebut the preliminary finding. At the same time, the Commission will launch a formal market investigation – expected to last up to 12 months but possibly shorter given the groundwork already laid – to examine specific practices such as egress fees, licensing, and interoperability. An advisory board of national regulators will weigh in, and a final designation decision would be published in the Official Journal.

Once designated, the companies have six months to submit a compliance report detailing the steps they have taken. The report is public, and business users can file complaints if they believe the measures are insufficient. The Commission can then open non‑compliance proceedings, which carry the 10% global turnover fine.

Industry observers predict that Amazon and Microsoft will simultaneously pursue two tracks: legal appeals while also engaging with the Commission to shape the compliance requirements. “Neither side wants a scorched‑earth battle,” said a former DG Comp official now in private practice. “There will be a negotiation behind closed doors about exactly what ‘interoperability’ means – because the legislation leaves enormous room for interpretation.”

A Tipping Point for the Cloud Market

For enterprise IT leaders, June 25, 2026, will be remembered as the day the ground rules of cloud procurement changed. Even if the final designation takes another 18 months to crystallise, the mere threat of regulation is already altering vendor behaviour. Amazon recently relaxed its Reserved Instances terms in the EU, and Microsoft launched a “Cloud for Sovereignty” package that includes encryption keys held by European trustees. Both moves, while framed as customer‑driven, read as pre‑emptive concessions.

The DMA’s expansion into infrastructure cloud services closes a circular logic that has frustrated buyers for a decade: you cannot move your data because the cloud is proprietary, but the cloud is proprietary because you cannot move your data. Breaking that loop may not immediately create a perfectly competitive market, but it will give enterprise architects the most powerful tool they have ever had – a legally enforceable right to walk away. As one CIO of a major European manufacturer put it, “For the first time, we will be able to judge a cloud on its technical merits, not on how hard it is to leave.”