EU Labels AWS and Azure as Cloud Gatekeepers, Risking 10% Fines

The European Commission has taken a preliminary step to designate Amazon Web Services and Microsoft Azure as gatekeepers under the Digital Markets Act, targeting them with obligations on interoperability and data access backed by fines of up to 10% of worldwide turnover. That's a bigger deal than it sounds. AWS and Azure didn't hit the DMA's quantitative thresholds (user numbers, revenue), but the Commission waved that off, citing what it calls "vast and entrenched user bases" and "lock-in effects and high switching costs." I've watched hyperscalers engineer stickiness for years - this is the regulator finally calling it what it is.

Lock-In and Ecosystem Size Drive the Decision Commission reasoning cuts straight to the competitive mechanics. "They both have vast and entrenched user bases and appear to benefit from lock-in effects and high switching costs, in addition to a large ecosystem." That ecosystem includes proprietary APIs, data egress fees, and integration chains that make moving workloads to another cloud painful. The DMA's gatekeeper obligations are designed to crack that open: mandatory interoperability, access to data generated on the platform, and fair competition rules. Henna Virkkunen, executive vice-president for tech sovereignty, security and democracy, didn't mince words: "Cloud services have become a cornerstone of Europe's economy - and a prerequisite for AI - with over half of EU businesses now relying on them." The message is clear - the EU sees cloud dominance as a bottleneck for AI adoption and European tech sovereignty.

Microsoft and Amazon Cry Foul; Rivals Welcome Scrutiny Microsoft's spokesperson tried to redirect: "We remain concerned that ignoring the growing power of Google Cloud and Gemini will tilt the market in a harmful way." Translation - Microsoft wants Google dragged in too. AWS went broader, arguing the Commission "disregard the breadth of cloud services available" and that the existing Data Act already covers cloud regulation. AWS added: "Adding another heavy layer of overlapping regulation under the DMA undermines European competitiveness." Meanwhile, the Open Cloud Coalition - which Microsoft dismisses as a Google lobbying front - praised the move. Their spokesperson said: "We particularly note the finding that existing customer lock-in may fuel enterprise AI, a development that mirrors long-standing market concerns over Microsoft's licensing and ecosystem practices." That's a direct jab at Microsoft's licensing terms that make it costly to run Windows Server or SQL Server outside Azure.

Compliance Clock Ticks: Six Months to Reshape Cloud Services If the preliminary findings become final - and Amazon and Microsoft get their chance to respond - both will have six months to bring their cloud services into DMA compliance. That means redesigning data portability flows, opening up APIs, and potentially unbundling services that currently lock customers into a single provider. Fines of 10% of worldwide annual turnover for non-compliance make this more than a paperwork exercise. The EU is betting that cloud interoperability requirements will lower switching costs and spur competition. Whether that accelerates European cloud startups or just adds compliance overhead for hyperscalers is the open question. One thing is certain: the DMA's scope just expanded beyond search and app stores into the infrastructure layer where most AI workloads actually run.

Source: European Commission lines up Amazon and Microsoft for cloud gatekeeper status
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