EU says Amazon and Microsoft cloud services should face tougher digital rules due to their dominant EU market position.
BRUSSELS: The EU said Thursday that the cloud services of Amazon and Microsoft should face tougher digital competition rules in Europe because of their dominant position in the sector.
Amazon Web Services (AMS) and Microsoft’s Azure are the largest and second-largest cloud computing services in the European Union respectively.
“These services will only continue to grow in importance, which is why it is essential that we ensure a well-functioning and competitive market,” EU antitrust commissioner Teresa Ribera (pic) said.
The EU opened a probe in November into whether AWS and Azure should come under the scope of the Digital Markets Act (DMA).
Despite not meeting quantitative thresholds like user numbers, the EU said it COULD apply the DMA regulations to firms with a “significant impact” on the market, and an entrenched and durable position — which it found that AWS and Azure appear to hold.
The DMA applies to services with more than 45 million monthly active end users in the EU and more than 10,000 yearly active business users.
The move risks further irking Washington as the US administration under President Donald Trump has railed against the rules, claiming they are an unfair trade barrier.
The companies can now argue against the EU’s preliminary findings before a final decision, which could come later this year.
AWS hit out at the preliminary findings, saying they “disregard the breadth of cloud services available to European customers”.
An AWS spokesperson said that the company faced “healthy competition” across Europe and that there were already “comprehensive” rules covering the sector.
“We will continue to engage with the commission to reach the right outcome for customers and Europe’s digital future,” the spokesperson said.
Microsoft said it continued “to engage constructively with the commission”.
A spokesperson said the company was “concerned that ignoring the growing power of Google Cloud and Gemini will tilt the market in a harmful way”.
US cloud providers make up two-thirds of the EU market. Google Cloud is the third-largest player but the EU opted not to launch a similar probe into it.
The DMA tells large technology firms it identifies as “gatekeepers” what they can and cannot do on their platforms.
For example, companies have to make sure their platforms are open to rivals to provide their services and allow users to delete any pre-installed apps.
Amazon’s Marketplace and Microsoft’s operating system already face DMA rules.
The EU is also investigating whether it needs to update the DMA.
