Business
Amazon and Microsoft Cloud Units Face EU ‘Gatekeeper’ Rules
The European Union has proposed classifying Amazon Web Services and Microsoft Azure as gatekeepers under the Digital Markets Act, expanding Big Tech rules to cloud computing and introducing stricter obligations on competition, interoperability and data portability.
Key Highlights
- The EU wants to name Amazon Web Services and Microsoft Azure as “gatekeepers.”
- The step would place both cloud businesses under the Digital Markets Act.
- Amazon and Microsoft will have the opportunity to respond before a final decision.
EU trust regulators proposed Thursday to classify Amazon web series (AWS) and Microsoft Azure as “gatekeepers” under its Digital Markets Act (DMA), extending the tech rules into the cloud computing sector.
If the reservation is approved, it would hold two largest cloud providers in the world to tougher rules aimed to reduce their power. This prohibits self preferencing and requires improved interoperability and data portability.,
Cloud Services Come Under DMA
The EU has also previously enforced the Digital Markets Act against, for example search engines, social media platforms and app stores. It would be a huge expansion, with the extension of the rules to cloud computing into a sector that is crucial for artificial intelligence.
Cloud services have become one of the building blocks of Europe’s economy, European Commission’s tech chief Henna Virkkunen said at the summit, noting that now over half of EU businesses depend on cloud, and that public cloud infrastructure investment had hit record levels.
The sector has to function within fair open and competitive markets in order to facilitate innovation and European tech sovereignty, she warned.
Amazon, Microsoft Respond
Amazon said the Commission’s probe ignores that a large number of cloud services are available to European customers and may dissuade investment and innovation.
Microsoft says regulators should note that ignoring the increased market power of Google Cloud and its Gemini AI platform as well will hit the market in a harmful way.
AWS and Microsoft Azure were singled out because of “financial strength, large market share, high overhead switching costs, and significant investments,” said the European Commission. Amazon and Microsoft will be given a chance to argue against the Commission’s findings ahead of a final decision later in the month.
Source: Reuters
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