The next great tech battle is not about apps, social networks or search engines. It is about the cloud. As AI drives an unprecedented surge in demand for computing power, EU wants tighter oversight of the dominant cloud platforms.
When a company considers leaving Amazon’s or Microsoft’s cloud, it looks straightforward on paper. Move the data, shift the applications, and carry on. In reality, the process can take months or even years. It can cost millions of euros and carry significant operational risks. That dependence on a handful of providers is one reason why the European Commission has decided to step in.
Brussels has reached a preliminary view that Amazon Web Services (AWS) and Microsoft Azure should be designated as “gatekeepers” under the EU’s Digital Markets Act (DMA), placing them under stricter regulatory obligations.
“This will help ensure access to secure, sustainable and interoperable cloud services in Europe,” said Teresa Ribera, the Commission’s Vice-President for Clean, Just and Competitive Transition. The same regime already applies to services operated by Google, Apple, Meta and Microsoft in other parts of their businesses.
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The Commission’s conclusion follows a seven-month investigation that gathered evidence from business users, competitors and other stakeholders. Regulators assessed the companies’ size, user base and market position. They also examined how easily customers can switch providers and how deeply their services are woven into broader digital ecosystems.
The invisible engine of the digital economy
A large share of the digital world now runs in the cloud. Banking apps, online retailers, streaming platforms, corporate software, hospital databases and many public services rely on remote servers operated by major cloud providers. Rather than build their own data centres, organisations rent computing power as needed.
The importance of cloud computing has surged alongside the rise of artificial intelligence. Training and running modern AI models requires enormous computing resources that few organisations can afford on their own.
Given their central role in Europe’s digital future, these services must operate in fair, open and competitive markets that foster trust and secure Europe’s tech sovereignty. Henna Virkkunen, European Commission Vice-President
As a result, cloud computing has become more than just digital infrastructure. It now forms the foundation of the AI economy. That is why the European Commission regards it as a strategic sector.
“Cloud services have become a cornerstone of Europe’s economy—and a prerequisite for AI—with over half of EU businesses now relying on them, combined with record investment in public cloud infrastructure,” said Henna Virkkunen, Vice-President for Tech Sovereignty, Security and Democracy. “Given their central role in Europe’s digital future, these services must operate in fair, open and competitive markets that foster trust and secure Europe’s tech sovereignty.”
Why AWS and Azure?
Amazon and Microsoft have dominated Europe’s cloud market for years. They command vast customer bases, enormous investment budgets and technical capabilities that rivals struggle to match. According to the Commission, AWS and Azure together account for roughly 60 per cent of the European cloud market.
Yet market share tells only part of the story. Regulators are equally concerned about what economists call the “lock-in effect”. Once a company builds its operations around a particular cloud platform, it often adopts that provider’s databases, analytics tools, cybersecurity services and AI products.
Over time, those elements become tightly interconnected. Moving elsewhere remains possible, but it can be expensive, disruptive and technically complex. That gives the largest providers a powerful advantage.
AI changes the equation
Until now, the EU’s efforts to curb the power of Big Tech have largely focused on search engines, social media platforms and app stores. Bringing cloud infrastructure within the DMA’s reach would mark a significant shift.
Only a few years ago, cloud computing was largely seen as a back-office technical service. Today it sits at the heart of the AI race. Microsoft offers Azure alongside AI services powered in part by OpenAI technology. Amazon has poured billions into its own AI tools and partnerships with model developers.
The Commission believes AI is rapidly becoming one of the decisive factors when companies choose a cloud provider. Businesses increasingly buy an entire package: computing power, data storage, developer tools and AI capabilities under one roof.
Regulators fear that booming demand for AI could further strengthen the market position of the biggest cloud providers and make life even harder for challengers.
What happens next?
If the Commission confirms its preliminary findings, AWS and Azure will have to comply with DMA obligations. The rules could make it easier for customers to move data between providers, improve interoperability and limit practices that favour a company’s own products within a broader technology ecosystem.
The goal is simple: prevent behaviour that weakens competition and give customers more freedom to choose.
Neither company agrees with the Commission’s assessment. Amazon argues that regulators underestimate the range of cloud services available to European customers and warns that stricter regulation could discourage investment and innovation.
We remain concerned that ignoring the growing power of Google Cloud and Gemini will tilt the market in a harmful way. — Microsoft
Microsoft, meanwhile, points to Google’s growing strength and says regulators are overlooking how quickly competition is evolving in both cloud computing and artificial intelligence. “We remain concerned that ignoring the growing power of Google Cloud and Gemini will tilt the market in a harmful way,” a Microsoft spokesperson said.
The Commission disagrees. According to Brussels, Google Cloud does not currently hold the same entrenched position in the European cloud market as AWS and Azure. “Nonetheless, we will of course keep our eyes on developments in the sector,” Commission spokesperson Ricardo Cardoso said.
Amazon and Microsoft can now respond to the Commission’s findings. If Brussels ultimately confirms its decision, both companies will have six months to comply.
Why this matters beyond Silicon Valley
Although the dispute pits regulators against technology giants, its consequences could reach far beyond boardrooms and government offices. Cloud computing now underpins thousands of digital services used every day by businesses and consumers alike. More competition and less dependence on a handful of dominant providers could eventually lower costs, broaden choice and create more room for European technology firms.
At its core, this is not really a battle about servers or data centres. It is a battle over who will control the infrastructure on which the next generation of digital services and artificial intelligence will be built. And in the age of AI, whoever controls the cloud increasingly controls the future.
