Four Disturbing Takeaways Re: Today’s EU Cloud Decision
By Paul Steidler: After weeks of anticipation, the European Commission announced this afternoon it has made a “preliminary” decision to designate Amazon Web Services (AWS) and Microsoft Azure as “gatekeepers” under the Digital Markets Act (DMA) for their cloud computing practices.
While the companies are expected to strongly contest this and have months to do so, the Commission is charging them with exercising market power in a manner that harms competition. Potential fines under the DMA are enormous. For one violation, companies can be assessed 10 percent of their annual global revenue.
Like other large U.S. tech companies, AWS and Microsoft have accommodated many of the European Commission’s demands for years, making investments and changes to their business practices to operate in Europe.
The designation under the DMA is unmerited for several fundamental reasons. The EU’s cloud sector is already highly competitive. It is also primarily governed by the EU Data Act and is subject to other EU laws. Today’s announcement seems at least partially driven by the EU’s recently announced digital sovereignty effort and for other political purposes.
Below are four important takeaways from the decision.
Timing shows profound disrespect. Though expected for weeks, the European Commission announcement came within hours of European states approving a broader trade agreement for which President Donald Trump had set a July 4 deadline. For EU politicos and bureaucrats, it is a way to snark at President Trump and his administration, which has repeatedly raised concerns about the DMA and other EU digital service taxes that target U.S. companies and are designed to extract billions of dollars in annual fines.
Market fundamentals are being ignored. EU cloud competition is extensive. In addition to AWS and Microsoft, EU cloud providers include Google Cloud, Oracle, and European providers such as OVH Cloud, IONOS, Scaleway, Deutsche Telekom, Orange Business Services, and others. Customers can, and often do, use more than one cloud provider.
DMA is a twisted fit to go after cloud providers. The DMA was created to address concerns where a large company might be able to control access to other companies (i.e., be a gatekeeper), especially mid-size and smaller retailers. That is not the case with cloud computing, where the competitors are known and can be contacted directly and easily.
Shows that the EU and the U.S. are at a tech impasse, which harms Europe most. Starting with a major speech on the administration’s vision for AI in Paris in February 2025, the Trump Administration has continually sought to engage with Europe to end arbitrary digital services taxes and work together on AI development. U.S. Under Secretary of State Jacob Helberg also spoke about this during a major April 1, 2026 speech in Brussels. Yet, the EU and its governing body, the European Commission, remain as hostile as can be.
Simply put, the US-EU tech relationship is broken. It needs to be fixed, especially if Europe is to attract sufficient investment in AI and realize the benefits of this technology. A good start would be for the U.S. government to vigorously advocate for AWS and Microsoft while conducting a holistic assessment of other, broader actions.