AWS says cloud market gatekeeper designation risks ‘deterring European investment and innovation’ as EU regulators plot competition crackdown

Amazon has hit back at EU lawmakers after the European Commission signalled its intent to designate the hyperscaler as a “gatekeeper” under the Digital Markets Act (DMA).

In a statement on 25 June, the Commission noted that Amazon Web Services (AWS) and Microsoft “hold an entrenched and durable position” in the EU cloud computing sector, with both potentially harming competition across the region.

AWS and Microsoft have already been designated as gatekeepers in other business areas, and with cloud computing, lawmakers are equally concerned the duo could stifle competition.

“Their cloud computing services AWS and Azure have achieved significant turnover, and their operational capacity and investments seem to have significantly outpaced those of competitors,” the Commission said.

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“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.”

The Commission also highlighted competition concerns regarding the influence of AI services on the broader market, noting that both firms’ AI tools have “become a decisive factor in cloud procurement”.

“Whilst AI is significantly increasing the demand for cloud-related services, AWS and Azure appear to retain a large proportion of this increased demand within their respective ecosystems.”

While the Commission noted that this is a “preliminary view”, the statement follows a seven month investigation into the influence of both companies.

If designated under the legislation, lawmakers could impose a series of obligations on both companies, such as the introduction of new interoperability and data portability features.

Teresa Ribera, the EU’s executive vice president for Clean, Just, and Competitive Transition, said both companies will have the opportunity to respond before “final decisions are taken”.

AWS hits back at EU claims

AWS has contested the claims made by the European Commission, with a spokesperson suggesting the preliminary findings “disregard the breadth of cloud services available to European customers”.

The spokesperson added that designation under the legislation could risk “deterring future European investment and innovation”.

“AWS faces healthy competition and customers across Europe have more choice, lower prices, and greater flexibility than ever before,” the spokesperson said.

“The EU already has comprehensive cloud regulation through the Data Act, and adding another heavy layer of overlapping regulation under the DMA undermines European competitiveness and access to cutting-edge information technology.”

AWS said it intends to work closely with the Commission to “reach the right outcome for customers”.

Long-running competition concerns

The move by the Commission comes as relations between US-based tech giants and the EU grow increasingly tense.

European regulators have made repeated attempts to limit the influence of US firms across the region, having been locked in a series of battles with Microsoft over its dominance in the productivity software market.

Geopolitical tensions, however, are adding fuel to the fire on this front, particularly with regard to data sovereignty.

Critics argue that European organizations have become over reliant on US technology services, prompting calls to seek alternative, home-grown options.

Earlier this month, the Commission unveiled the technological sovereignty package, a series of measures aimed at strengthening digital sovereignty capabilities across the EU - spanning areas such as AI, cloud computing, and semiconductor manufacturing.

Speaking at the time, Ursula von der Leyen, president of the European Commission, said the package comes in direct response to concerns about overreliance on foreign technology services.

“We cannot afford to depend on others for the technologies that keep our hospitals running, our energy grids stable, and our services secure,” she said.

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