EU to assess whether Amazon and Microsoft cloud businesses need extra scrutiny

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LONDON (AP) — The cloud businesses of Amazon and Microsoft could face stricter scrutiny from European Union regulators, who are looking into whether they should fall under the bloc's dragnet on Big Tech companies.

The bloc's executive Commission said Tuesday that it's assessing whether Amazon Web Services and Microsoft Azure should be classified as “gatekeepers” under the EU's Digital Markets Act.

The sweeping rule book is designed to rein in the market power of tech companies with a list of do's and don'ts, under threat of hefty penalties.

Gatekeepers face extra obligations under the DMA and regulators have already given the label to other parts of the two companies, such as Amazon Marketplace and Microsoft's LinkedIn. The designation is based partly on user numbers, which makes it harder to apply to cloud computing providers.

The Commission said it will look at whether Amazon Web Services and Microsoft Azure “act as important gateways between businesses and consumers” despite not meeting the thresholds. Market research indicates that cloud service providers like AWS and Azure hold “very strong positions in relation to businesses and consumers,” it said.

Cloud computing technology allows companies to remotely access massive computing equipment and services without having to purchase and maintain physical infrastructure.

Last month's Amazon Web Services outage, which disrupted internet use for hours, highlighted the dependency of many digital services, including artificial intelligence, on cloud computing providers.

“We’re confident that when the European Commission considers the facts, it will recognize what we all see," Amazon Web Services said in a statement. "The cloud computing sector is extremely dynamic, with companies enjoying lots of choice, unprecedented innovation opportunity, and low costs, and that designating cloud providers as gatekeepers isn’t worth the risks of stifling invention or raising costs for European companies.”

Microsoft said Europe's cloud sector is innovative and highly competitive. "We stand ready to contribute to the European Commission’s market inquiry,” it said.