EU Launches DMA Investigation into US Hyperscalers over Market Power

The European Union wants to implement its law to level the playing field and regulate the digital sector. Hyperscalers Amazon and Microsoft will be the focus of the investigations launched by the European Commission (EC) under the Digital Markets Act (DMA).

EC's press release dated 18 November 2025 stated that the EC has opened three market investigations on cloud computing services. Meanwhile, the leaders of EU member states are in Berlin to attend the Summit on European Digital Sovereignty. The summit aims to further develop key aspects of an independent, secure, and innovation-friendly digital future for Europe.

Designation of Gatekeepers

The EU acknowledges that cloud computing is the core of many digital services and is crucial for the development of artificial intelligence (AI). However, the cloud services sector must be fair and competitive, with no player gaining undue advantage.

Amazon Web Services (AWS) and Microsoft Azure wield significant influence on businesses and consumers. The DMA regulates gatekeepers—Big Tech companies—from engaging in unfair or anti-competitive practices.

The EC is considering designating them as gatekeepers. Also, the law requires firms providing core platform services to inform the Commission if they meet the annual turnover thresholds.

Core platform services include social networks, app stores, advertising networks, browsers, intermediation services, operating systems, video-sharing platforms, search, cloud computing, virtual assistants, and messaging services.

AWS and Azure are technically at gatekeeper level, but the EC says both have not met DMA gatekeeper thresholds for size, user numbers, and market position.

Teresa Ribera, EC's executive vice president for a clean, just and competitive transition, said, 'Cloud computing services are vital for Europe's competitiveness and resilience. We want this strategic sector to grow on fair, open and competitive terms.'

Market Dominance

In Q3 2025, global cloud infrastructure service revenues grew 28% year-over-year to $107 billion compared to Q3 2024. AWS and Azure were the leading providers, garnering market shares of 29% and 20%, respectively. Google Cloud ranked third with 13%. In Europe, the three US hyperscalers hold more than 65% of the market.

Insofar as the EU market is concerned, AWS is a gatekeeper only for Amazon Marketplace and Ads for Amazon. Azure's designation is confined to Windows OS and LinkedIn. The EC will determine whether they should be DMA gatekeepers based on their cloud businesses.

DMA Structural Review

A third investigation examines current DMA rules and their adequacy to curb anticompetitive practices in the cloud computing sector. The EC will gather information from relevant market participants regarding compliance with their obligations.

The major issues are interoperability, business users' access to data, bundled offerings, and contractual balance. For this structural review, the EC might need to add or adapt new rules for cloud services only.

Max von Thun, Director of Europe & Transatlantic Partnerships for the Open Markets Institute, favours the investigations. He said the EU must put a stop to unfair and anti-competitive tactics that lock out industry rivals. Big Tech must loosen their grip on Europe's cloud infrastructure.

Timetables

The Commission hopes to complete the market investigations on Amazon Web Services and Microsoft Azure within 12 months. If the EC finds that Amazon and Microsoft qualify as gatekeepers, the companies have six months to ensure full compliance of their designated cloud computing services with the DMA obligations.

Expect the final report on the DMA's application to cloud markets within 18 months. It should include proposals to update DMA obligations regarding cloud services pursuant to Articles 12 and 49 of the DMA. The investigations should result in contestable and fair markets in the digital sector.