EU probes cloud service providers, but it has nothing to do with recent Cloudflare outage

The European Commission has opened three separate investigations into cloud computing services under the Digital Markets Act (DMA).

The announcement came at a time when the world was freaking out about “half of the internet” being down due to a major Cloudflare outage.

Companies have already learned the hard way that reliance on cloud providers and their market consolidation can result in downtime and, therefore, lost revenue. Cloudflare is just the most recent example of how cloud providers can bring businesses to their knees. For some, the outages of Amazon’s AWS and Microsoft Azure have become a nightmare they don’t want to remember.

“Cloud computing is the backbone of many digital services, and it is crucial for AI development. To foster innovation, trust, and Europe’s strategic autonomy, cloud services must be provided in a fair, open, and competitive environment,” the executive branch of the EU said in a press release published on Tuesday.

Specifically, the European Commission, as well as the Authority for Consumers and Markets (ACM) from the Netherlands, will investigate whether Microsoft Azure and Amazon Web Services should be considered as ‘gatekeepers.’

Under the DMA, gatekeepers are large companies that have a significant impact on the internal EU market and operate a so-called Core Platform Service, which many businesses, organizations, and people rely on, such as online search engines, social networks, operating systems, app stores, web browsers, and online advertising services.

In September 2023, the European Commission designated six tech companies as gatekeepers: Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft. In total, 23 Core Platform Services provided by those gatekeepers are currently designated, including iOS, Google Search, YouTube, and Facebook Marketplace.

If the European Commission’s investigation finds that Microsoft Azure and Amazon Web Services qualify as important gateways under the DMA, these cloud computing services will be added to the list of Core Platform Services for which Amazon and Microsoft are already designated as gatekeepers.

A third investigation will assess whether the DMA can effectively tackle practices that may limit competitiveness and fairness in the EU cloud computing sector. For example, the DMA dictates that users should be able to easily switch between cloud service providers, without restrictions or additional costs. Furthermore, there should be interoperability between cloud services, and business users should have access to data.

The European Commission aims to round up its investigations into Microsoft Azure and Amazon Web Services within 12 months. The investigation of the DMA’s application to cloud markets will be published within 18 months.

“With today’s market investigations, we want to assess whether Amazon and Microsoft, with their cloud services Amazon Web Services and Microsoft Azure, qualify as gatekeepers, and if yes, how to ensure an effective application of the Digital Markets Act in cloud computing services,” Henna Virkkunen, Executive Vice-President for Tech Sovereignty, Security and Democracy, said in a statement.

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