Microsoft’s Azure, Amazon’s AWS Come Under EU’s Digital Markets Act Scanner For Potential Curbs

• The EU investigation into Azure and AWS will be undertaken, despite the two companies not meeting the DMA gatekeeper thresholds for size, user numbers, and market position, according to the European Commission.
• It added that analyses of the cloud market in recent years indicate that Microsoft’s Azure and Amazon’s AWS “occupy very strong positions.”
• In addition to this, the Commission is also trying to assess if DMA is “effective in addressing practices that limit competitiveness or are unfair in the cloud sector.”

Microsoft Corp. (MSFT) and Amazon.com Inc.’s (AMZN) cloud services, Azure and Amazon Web Services, have come under the European Union’s Digital Markets Act (DMA) scanner for potential curbs.

The European Commission announced on Tuesday that it has launched market investigations into Microsoft and Amazon’s cloud computing services to assess whether they should be designated as gatekeepers.

In addition to this, the Commission is also trying to assess if DMA is “effective in addressing practices that limit competitiveness or are unfair in the cloud sector.”

Microsoft and Amazon shares were down by more than 1% in Tuesday’s pre-market trade. Retail sentiment on Stocktwits around both companies trended in the ‘bearish’ territory at the time of writing.

DMA’s Gatekeeper Rule

The European Commission has noted that it will investigate whether Azure and AWS should be designated as gatekeepers in the context of cloud computing, despite not meeting the DMA gatekeeper thresholds for size, user numbers, and market position.

It added that analyses of the cloud market in recent years indicate that Microsoft’s Azure and Amazon’s AWS “occupy very strong positions.” The Commission’s investigation will also examine whether certain features of their cloud computing services contribute to further strengthening the market position of Azure and AWS.

Investigation Into DMA’s Effectiveness

The Commission also noted that it is gathering information from relevant players in the cloud computing market to assess if the existing provisions under the DMA are adequate to maintain competitiveness in this sector.

“The investigation will cover, for instance, obstacles to interoperability between cloud computing services, limited or conditioned access for business users to data, tying and bundling services, and potentially imbalanced contractual terms,” it added.

MSFT stock is up 20% year-to-date, while AMZN stock is up 6%.

Also See: Elon Musk Wants To Tell His Own Story About Time In Trump Administration After Walter Isaacson’s Criticism

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