Amazon and Microsoft cloud services could face stricter EU competition rules after Brussels launched probes to assess their market power.
Brussels had been under pressure to include the services under the scope of a major law because of the dominance of US cloud providers, which hold around two thirds of market share in the 27-nation bloc.
The European Commission – the EU's digital regulator – said on Tuesday that it will investigate whether Amazon Web Services (AWS) and Microsoft's Azure should come under the scope of the Digital Markets Act (DMA).
Despite being the third largest, Google Cloud was not included.
The DMA is part of the European Union's bolstered legal arsenal that seeks to make the digital market fairer with a list of do's and don'ts for Big Tech companies, which it refers to as "gatekeepers" such as Apple.
The twin probes aim to assess whether AWS and Microsoft "should be designated as the gatekeepers on cloud computing," EU tech chief Henna Virkkunen said at a Berlin summit focused on pushing greater European digital sovereignty.
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In a statement the commission said it would analyse whether the two "act as important gateways between businesses and consumers, despite not meeting the DMA gatekeeper thresholds for size, user number and market position".
EU regulators will seek to conclude the investigations within a year.
Dynamic sector
Microsoft and AWS insisted the cloud sector was competitive.
"We're confident that when the European Commission considers the facts, it will recognise what we all see – the cloud computing sector is extremely dynamic, with companies enjoying lots of choice, unprecedented innovation opportunity, and low costs," an AWS spokesperson said.
"Designating cloud providers as gatekeepers isn't worth the risks of stifling invention or raising costs for European companies," the spokesperson added.
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"The cloud sector in Europe is innovative, highly competitive and an accelerator for growth across the economy. We stand ready to contribute" to the probe, a Microsoft spokesperson said.
Brussels announced it would also open a third probe to find out whether it needs to update the DMA to make sure it can combat practices that "may limit competitiveness and fairness in the cloud computing sector in the EU".
AWS leads the cloud computing market, followed closely by Microsoft Azure, with Google Cloud in third place.
Concern over outages
Brussels defended the decision not to probe Google.
"Our preliminary evidence shows that Google is playing a less important role for now on our market than the two ones that we're investigating," EU digital affairs spokesman Thomas Regnier told reporters.
There has also been growing concern after a raft of outages in recent months.
In October, Microsoft cloud clients experienced widespread service disruptions. Among them was Alaska Airlines, whose customers were unable to check in.
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That came after Amazon cloud troubles last month forced popular services ranging from streaming platforms to messaging apps offline for hours.
Amazon and Microsoft already face stricter rules for their other services including Amazon Marketplace and Microsoft's LinkedIn platform.
The DMA gives the EU the power to impose fines of up to 10 percent of a company's total global turnover in the event of any violations.
(with AFP)
