Report from Reuters
In Brief – The European Commission has announced three Digital Markets Act (DMA) market investigations into cloud services and its market leaders. Two of the probes will assess if the cloud services business of either or both Amazon and Microsoft should be designated as gatekeeper “core platform services” under the DMA, which would bring regulatory mandates intended to protect fair competition for business users and smaller competitors, including interoperability and not favoring their own services over rival offerings. Amazon Web Services (AWS) is the largest cloud provider globally followed by Microsoft’s Azure. The third investigation will assess if the DMA can effectively tackle anticompetitive practices in cloud computing. The Commission aims to conclude the company investigations within 12 months, with the broader DMA review expected to run for 18 months. An Amazon spokesperson said, “designating cloud providers as gatekeepers isn’t worth the risks of stifling invention or raising costs for European companies.”
Context – US-EU disruptions during the first year of the second Trump Administration have highlighted perceived economic and strategic vulnerabilities caused by overwhelming reliance on non-European technology providers, with calls for “digital sovereignty” increasingly commonplace. The Eurostack Initiative is a noteworthy example, recommending efforts across all levels of the digital ecosystem, including chips, cloud computing, connectivity, applications, and artificial intelligence. Allegations that Microsoft leverages its dominant software packages, including Office 365 and Windows OS, to preference its other digital services, including Azure, have dogged the company. Last year, Microsoft reached an agreement with the association of Cloud Infrastructure Services Providers in Europe to allow popular MS software to be hosted on the platforms of small and mid-size European cloud services companies. In the UK, Amazon and Microsoft cloud services are being investigated for dominance, including possible regulation under the Digital Markets, Competition and Consumer Act, the UK version of the DMA.