Cloud Hidden, Rationale Unknown: The DMA’s Foggy Attack on AWS and Azure

On one of his quintessential albums, Poetic Champions Compose, the legendary singer, songwriter, and poet Van Morrison’s song "Alan Watts Blues”—named for the British thinker and eccentric—speaks of a time of civilizational decay, when “the empires are all turning to rust again,” and of the need to escape the chaos and become “cloud-hidden, whereabouts unknown.” Something similar seems to be true in the European Union (EU). After decades of falling behind the United States in productivity, Europe continues to double down on its reactionary Digital Markets Act (DMA), an ill-conceived attempt to escape from its relative economic decline. And, with its recent preliminary decision that Amazon’s AWS and Microsoft’s Azure should be designated under the DMA, the European Commission now appears poised to venture into the cloud and confirm beyond a doubt the DMA’s targeting of U.S. firms.

Until now, all but one of the 23 core platform services offered by gatekeepers and that have been subject to the strictures of the DMA have satisfied the statute’s quantitative thresholds: for gatekeepers, annual revenue within the EU of at least €7.5 billion or a market capitalization of at least €75 billion; for core platform services, at least 45 million monthly active end users and at least 10,000 yearly active business users in the EU. But if the EU designates AWS and Azure, a non-trivial 12 percent of the DMA’s core platform services would be offerings by U.S. firms that do not meet those quantitative criteria. Instead, they would be captured by the Commission’s application of the DMA’s more general, qualitative, and subjective factors. These require the Commission to assess whether a firm “has a significant impact on the internal market,” “provides a core platform service which is an important gateway for business users to reach end users,” and “enjoys an entrenched and durable position in its operations, or it is foreseeable that it will enjoy such a position in the near future.”

At one level, it is clear that neither AWS nor Azure satisfies even the DMA’s broad and more subjective qualitative criteria. Although Article 2(2) of the DMA explicitly lists “cloud computing services” as one of its 10 core platform services, and it indeed may be true that the marketplace components of AWS and Azure constitute a “gateway for business users to reach end users,” it is hard to see how their core data processing and storage services are gateways. In contrast with the other core platform services designated under the DMA—social networks, intermediation tools, messaging services, video sharing, search, browsers, ads, and operating systems—these services are not consumer-facing and do not operate as two-sided platforms connecting users with businesses.

In addition, even if the cloud computing services offered by AWS and Azure could generally constitute a gateway in principle, there are no grounds for holding that either “enjoys an entrenched and durable position in its operations, or it is foreseeable that it will enjoy such a position in the near future.” Under regular EU competition law, a firm with a market share under 40 percent is typically presumed not to be dominant. And neither AWS nor Azure holds a 40 percent share of the cloud market, suggesting that they do not enjoy an “entrenched and durable position.” What’s more, the cloud space is dynamic and growing, which confirms that their market positions are likely to erode unless they continue to innovate. AWS and Azure face intense competition not only from Google, CoreWeave, Oracle, and IBM, but also from many smaller, active, and expanding players.

While there is little doubt that the DMA’s quantitative thresholds were established with an eye toward excluding European firms rather than including them just to “appease the U.S.,” designating AWS and Azure would make the DMA’s discriminatory nature almost impossible to hide. If the Commission has no problem abandoning the DMA’s quantitative criteria for a non-trivial number of core platform services, then why aren’t large EU tech firms like Spotify also gatekeepers? Spotify clearly has a significant impact on the European market, with likely over €6 billion in revenues and nearly 200 million monthly active users—likely far more users than, for example, Google Shopping, which is designated under the DMA—as well as a potentially greater than 50 percent share of the EU music streaming market. That share is far higher than the shares Google, Meta, or Amazon, for example, enjoy in the advertising market, where they are designated.

There’s an even more obvious omission: SAP, Europe’s largest software company. Indeed, SAP already appears to meet the quantitative thresholds spelled out in the DMA for gatekeeper designation. The company had approximately €17 billion in EMEA revenues in 2025 and likely well over 10,000 business users for its enterprise resource planning (ERP) platform. Why, then, should it not also be designated under the DMA? Because its ERP service is not a “core platform service which is an important gateway for business users to reach end users”? That position would be hard to maintain if AWS and Azure are designated. Like SAP’s ERP platform, the processing and hosting services offered by Azure and AWS are neither two-sided nor consumer-facing; they are operational software used by businesses.

Not only does SAP’s ERP offering appear to satisfy the DMA’s core platform service quantitative threshold while AWS and Azure do not, but it may very well have a far more dominant and entrenched market position than either AWS or Azure can boast. Specifically, even seemingly low estimates of SAP’s ERP market share in Europe are more than comparable to those enjoyed by AWS and Azure in cloud. Simply put, if the Commission moves forward with designating Azure and AWS while continuing to overlook firms like SAP and Spotify, it will have little ground left to claim that the DMA is not targeting U.S. tech platforms but simply preventing bad behavior by large tech firms that regular competition law enforcement under Article 102 has proven ill-equipped to address.

In “Alan Watts Blues,” Morrison writes that “when the fog comes rolling in,” it “just might do me some good.” The Commission appears to believe something analogous: that expanding the DMA into cloud will be a positive step for Europe’s digital markets. But the reality could not be more different. There is no clear quantitative or qualitative rationale for designating AWS and Azure as core platform services under the DMA, and doing so would make inescapable the conclusion that the DMA intentionally targets U.S. tech platforms while giving EU tech giants like SAP and Spotify a pass. At a time when driving innovation and strengthening the transatlantic alliance are critical, one can only hope that the Commission makes the right decision by keeping the DMA out of the cloud.