The European Union's antitrust authorities have moved to designate Amazon Web Services and Microsoft Azure as 'gatekeepers' under the bloc's flagship Digital Markets Act, a decision that would impose substantial regulatory obligations on the world's two largest cloud computing providers. This preliminary finding, announced on June 25, represents a watershed moment in EU tech regulation by extending enforcement beyond traditional digital platforms into the critical infrastructure underpinning modern enterprise and artificial intelligence systems.
Under the gatekeeper designation, Amazon and Microsoft would face a comprehensive suite of restrictions designed to prevent anti-competitive behaviour. These obligations would include curbs on self-preferencing practices, where cloud providers might favour their own services over competitors' offerings on their platforms. The rules would also mandate interoperability measures and data portability requirements, forcing the two tech giants to facilitate customer switching and third-party integration in ways that currently remain limited or difficult to achieve.
This regulatory expansion into cloud infrastructure marks a dramatic escalation from the EU's previous enforcement targets. Until now, the Digital Markets Act has primarily focused on core digital platform services such as search engines, social media networks, and app distribution ecosystems. By widening the scope to encompass cloud computing, EU regulators are acknowledging that control over computational infrastructure has become as strategically important as traditional gatekeeping roles in the digital economy. Given that over half of European businesses now depend on cloud services and that artificial intelligence development increasingly relies on cloud platforms, the stakes of this decision extend far beyond corporate boardrooms.
The preliminary determination follows an intensive seven-month investigation undertaken by the European Commission. Regulators examined the market position of AWS and Microsoft Azure, focusing on several structural factors that elevate them above competitors. The Commission highlighted their substantial combined turnovers, operational capabilities exceeding those of rivals, and massive investments that reinforce their competitive moat. Perhaps more significantly, the investigation identified lock-in effects and switching costs that make it difficult for customers to migrate between platforms, a key indicator of gatekeeping power.
For Southeast Asian businesses and policymakers, this EU action carries important implications. Many regional companies utilise AWS or Azure services, and strict European regulations on these platforms could reshape their service offerings, pricing models, and feature availability. The interoperability and data portability requirements, if implemented, might ultimately benefit Asian enterprises by reducing vendor lock-in, though compliance costs could initially be passed to customers through higher prices. More broadly, the EU decision signals that capital-intensive digital infrastructure sectors face intensifying regulatory scrutiny globally, potentially prompting other jurisdictions to pursue similar oversight frameworks.
The EU's identification of artificial intelligence tools and cloud partnerships as decisive factors in procurement decisions underscores how quickly technology markets evolve beyond traditional competitive boundaries. AWS and Microsoft have both aggressively integrated AI capabilities into their cloud offerings and forged strategic partnerships with AI developers and enterprises. The regulators viewed these integrated advantages as further evidence of gatekeeping power, recognising that control over AI-enabling infrastructure represents a new dimension of market dominance requiring regulatory attention.
Amazon has already mounted a vigorous defence against the preliminary findings, arguing that the assessment overlooks the diversity of cloud services available to European customers and risks damaging investment incentives for European innovation. The company contended that existing EU regulation, particularly the Data Act, already provides comprehensive oversight of cloud operations, and that layering additional Digital Markets Act obligations would create duplicative and burdensome regulatory requirements. AWS suggested that such regulatory stacking could ultimately disadvantage European companies attempting to compete globally with fewer operational constraints than their American and Chinese counterparts.
Microsoft, meanwhile, adopted a different tack in its response, pivoting attention toward Google Cloud's expanding market presence. By highlighting Google's growth and its associated Gemini AI tools, Microsoft attempted to shift the regulatory focus away from the two largest providers toward their rising competitor. This strategic framing reflects mounting concerns among major tech companies that EU regulators may be attempting to constrain competition at the top while inadvertently advantaging challenger platforms still building their market positions.
The Commission's preliminary findings provide both Amazon and Microsoft with a formal opportunity to submit counter-arguments and evidence challenging the regulatory assessment. During this period, lasting several months, the two companies will likely mobilise substantial legal and economic expertise to contest the designation. They may present data demonstrating greater market competition than regulators acknowledge, argue that their AI innovations benefit customers, or contend that alternative competitive constraints limit their gatekeeping power. These submissions could materially influence the final regulatory determination.
The eventual outcome of this process will establish precedent for how EU authorities conceptualise and regulate digital infrastructure sectors more broadly. If the gatekeeper designation proceeds, it could embolden regulators in Europe and globally to subject other specialised digital infrastructure providers—data centres, semiconductor supply chains, telecommunications networks—to similar obligations. Conversely, if Amazon and Microsoft successfully defend against the preliminary findings, it might establish boundaries around how expansively the Digital Markets Act can be applied beyond platform services.
For technology companies and digital enterprises operating across multiple jurisdictions, the EU's approach underscores an increasingly fragmented regulatory landscape. While American and most Asian regulators have thus far taken more permissive approaches to cloud infrastructure, European authorities are pursuing aggressive market supervision. This divergence creates compliance challenges and strategic uncertainties, particularly for multinational firms attempting to maintain unified service architectures across regions with fundamentally different regulatory expectations and requirements.
The designation of AWS and Microsoft as gatekeepers would ultimately reshape competitive dynamics in the enterprise cloud market. By reducing switching costs and enabling interoperability, the rules could create space for smaller competitors to gain market share, potentially benefiting European cloud providers seeking to challenge American dominance. However, immediate effects would likely prove more modest, as compliance with new obligations typically requires significant technical and operational investments that established providers can absorb more readily than emerging competitors.
