EU Takes Aim at Tech Giants: Cloud Computing Under the Microscope

The European Union (EU) is once again flexing its regulatory muscles, this time turning its attention to the cloud computing services provided by Amazon and Microsoft. The European Commission (EC) has kicked off three separate investigations to see if these tech giants should be labeled as "gatekeepers" under the EU's Digital Markets Act (DMA). The twist here is that neither company currently meets the size or market dominance thresholds set by the DMA. The DMA sets some pretty strict rules. For a company to be considered a gatekeeper, it needs to have over 45 million monthly active users and a market cap of more than 75 billion euros. But the EU has a history of bending the rules when it suits them. Even if a company doesn't meet these thresholds, regulators can still decide to slap them with stricter regulations. Critics argue that the DMA could have unintended consequences, like stifling free speech. The act's requirements for interoperability and alternative ranking systems might push big platforms to adopt more cautious moderation policies. This could lead to a more uniform approach to content governance, potentially reducing the visibility of controversial or politically sensitive viewpoints. Meanwhile, the third investigation is looking at whether the DMA's current framework is enough to tackle what the EC describes as anticompetitive practices in the cloud sector. The EC wants to ensure that cloud computing is provided in a fair and competitive environment, which they say is crucial for innovation and Europe's digital competitiveness. AWS and Microsoft have responded to the probes. AWS is confident that the EC will see that the cloud computing sector is dynamic and innovative, and that designating cloud providers as gatekeepers could stifle invention and raise costs. Microsoft, on the other hand, is ready to contribute to the inquiry. If the EC finds that AWS and Azure are indeed important gateways between businesses and customers, they could be added to the list of core platform services. This would trigger new duties, like interoperability requirements and limits on favoring their own products. The EC aims to wrap up its investigations within 12 months, with a potential six-month compliance period for Amazon or Microsoft if they are designated as gatekeepers. The broader investigation into the DMA's adequacy in governing the cloud market is expected to conclude within 18 months and could result in formal updates to the law.