Investigations should clarify whether American tech giants act as important gateways between businesses and consumers, despite not meeting the Digital Market Act gatekeeper thresholds for size and market position. If Commission concludes that Microsoft and Amazon fulfil the criteria, the companies would have six months to ensure full compliance of their designated cloud computing services with the Digital Market Act’s obligations.
In total, three market investigations on cloud computing services under the Digital Markets Act (DMA) were opened by the Commission. It aims to assess if the DMA can effectively tackle practices that may limit competitiveness and fairness in the cloud computing sector in the EU.
Amazon Web Services, Microsoft Azure in the crosshairs
Analyses of cloud markets that have been conducted in recent years indicate that the cloud computing services Microsoft Azure and Amazon Web Services occupy very strong positions in relation to businesses and consumers. Moreover, the Commission will assess if certain features of the cloud sector may further reinforce the position of Microsoft Azure and Amazon Web Services.
Cloud computing services are vital for Europe’s competitiveness and resilience. We want this strategic sector to grow on fair, open, and competitive terms. – Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition
“Cloud computing services are vital for Europe’s competitiveness and resilience. We want this strategic sector to grow on fair, open, and competitive terms. That’s why today we are opening investigations into whether Amazon’s and Microsoft’s leading cloud computing services, Amazon Web Services and Microsoft Azure, should be subject to the Digital Markets Act’s (DMA) obligations, said Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition, on Tuesday, 18 November. “We will also look at whether the DMA’s existing rules need to be updated so Europe can keep pace with fast-evolving practices in the cloud sector,” Ms Ribera added.
If the Commission’s investigation finds that Microsoft Azure and Amazon Web Services qualify as important gateways under the DMA, the cloud computing services would be added to the list of core platform services for which Amazon and Microsoft are already designated as gatekeepers.
Results within twelve months
The Commission aims to conclude the market investigations on Microsoft Azure and Amazon Web Services within one year. Should the Commission conclude Microsoft and Amazon fulfil the criteria to be designated as gatekeepers for their cloud computing services under the DMA, Amazon and Microsoft would have six months to ensure full compliance of their designated cloud computing services with the DMA obligations.
The market investigation on the DMA’s application to cloud markets will result in a final report to be published within 18 months, which may propose the update of the DMA obligations in respect to cloud.
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When conducting an investigation, the Commission assesses elements such as the provider’s size, the number of users, network effects, scale and scope effects, lock-in and switching costs, and the conglomerate corporate structure or vertical integration of that company.
In these investigations, the Commission is supported by the Authority for Consumers and Markets (ACM), the Dutch competition authority, in the form of a joint investigative team, as provided for in the cooperation rules under the DMA.
