Amazon, Microsoft cloud services could face tougher EU rules

BERLIN: Amazon and Microsoft cloud services could face stricter EU competition rules as Brussels probes their market power, the bloc’s tech chief said Tuesday.

Twin investigations aim to assess whether the tech giants “should be designated as the gatekeepers on cloud computing,” Henna Virkkunen said at a summit in Berlin focused on the push for greater European digital sovereignty.

The European Commission, the bloc’s digital regulator, said it will investigate whether Amazon Web Services (AWS) and Microsoft’s Azure should come under the scope of the Digital Markets Act (DMA).

In a statement it said it would analyse whether the two “act as important gateways between businesses and consumers, despite not meeting the DMA gatekeeper thresholds for size, user number and market position”.

The commission will seek to conclude the investigations within a year, it added.

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“We’re confident that when the European Commission considers the facts, it will recognise what we all see - the cloud computing sector is extremely dynamic, with companies enjoying lots of choice, unprecedented innovation opportunity, and low costs, and that designating cloud providers as gatekeepers isn’t worth the risks of stifling invention or raising costs for European companies,” an AWS spokesperson said.

Brussels announced it would also open a third probe to find out whether it needs to update the DMA to make sure it “can effectively tackle practices that may limit competitiveness and fairness in the cloud computing sector in the EU”.

The DMA is part of the European Union’s bolstered legal armoury that seeks to make the digital sphere fairer with a list of do’s and don’ts for Big Tech.

For example, tech titans must offer users the possibility to choose between different web browsers and search engines, via so-called “choice screens”.

The law gives the EU the power to impose fines of up to 10 percent of a company’s total global turnover.

Brussels had been under pressure to include the probed services under the bill’s scope because of the dominance of US cloud providers, which hold around two thirds of market share in the 27-nation bloc.

AWS leads the cloud computing market, followed closely by Microsoft Azure, with Google Cloud in third place. Google is not under investigation by the EU.

There has also been growing concern after a raft of outages in recent months.

In October Microsoft cloud clients experienced widespread service disruptions. Among them was Alaska Airlines, whose customers were unable to check in.

That came after Amazon cloud troubles last month forced popular services ranging from streaming platforms to messaging apps offline for hours.

Amazon and Microsoft already face stricter rules for their other services including Amazon Marketplace and Microsoft’s LinkedIn platform.