Why Did the EU Extend the DMA to Cloud Infrastructure Now?

According to the European Commission's press release of June 25, 2026, the decision was driven by a three-year investigation that found "Azure and AWS enjoy entrenched market positions due to high switching costs, network effects, and integration with other core platform services." The Commission specifically cited that Azure is bundled with Microsoft 365 and Windows Server, while AWS is deeply integrated with Amazon's e-commerce and logistics platforms. The DMA was originally designed for consumer-facing "core platform services" like search engines and social networks, but the Commission argued that cloud infrastructure meets the same criteria when it functions as a bottleneck for enterprise digital transformation. Bloomberg reported that the designation triggers a six-month compliance period, meaning Azure and AWS must submit detailed compliance plans by December 25, 2026, with full implementation required by June 25, 2027.

What Exactly Are the New Obligations for Azure and AWS?

The DMA requires gatekeepers to allow third-party services to interoperate with their cloud platforms, provide real-time data portability APIs, and refrain from ranking their own services higher than competitors in cloud marketplaces. For Azure, this means Microsoft must allow customers to run Windows Server and SQL Server on competing clouds without additional licensing fees—a practice the Commission called "effective self-preferencing." For AWS, the ruling targets the bundling of EC2 with other AWS services like RDS and S3, which the Commission said creates "artificial switching costs." According to the European Commission, non-compliance can result in fines of up to 10% of annual global revenue, and for systemic non-compliance, the Commission can impose structural remedies including forced divestiture of cloud units. This is the first time the DMA has included a divestiture threat for enterprise infrastructure.

Who Benefits Most From This Regulatory Earthquake?

The clearest winners are European cloud providers who have long complained about unfair competition. OVHcloud, the French cloud provider, has been a vocal advocate for DMA application to cloud services. According to OVHcloud CEO Michel Paulin in a June 26 statement, "This decision levels the playing field for European cloud innovation." Deutsche Telekom's T-Systems, which operates a sovereign cloud with Google Cloud, also stands to gain as corporate customers seek compliant alternatives. Smaller providers like Scaleway and Ionos could capture migration flows from customers seeking to avoid hyperscaler lock-in. However, the biggest beneficiary may be Google Cloud, which is not designated as a gatekeeper—Google Cloud holds roughly 10% of the EU market versus Azure's 30% and AWS's 35%. Google Cloud can now market itself as the "compliant cloud" while offering interoperability with Azure and AWS under the new rules.

Verdict: European challengers and Google Cloud are the structural winners; Azure and AWS face margin compression and operational complexity.

Predictions

1. By December 2027: The European Commission will open a formal non-compliance investigation against Microsoft Azure, focusing on whether its Windows Server licensing changes genuinely enable competitive cloud migration. The investigation will be triggered by a formal complaint from OVHcloud.
2. By June 2028: AWS will announce a structural separation of its EU cloud operations into a separate legal entity, mirroring the approach taken by Google in its ad tech business, to comply with the DMA's divestiture threat.
3. By 2029: The combined market share of Azure and AWS in the EU will decline from ~65% to ~50%, with Google Cloud and European providers absorbing the lost share. The EU cloud market will grow to €100B+, but hyperscaler margins will compress by 800 basis points.

Timeline of Events:

• March 2024: European Commission launches preliminary investigation into cloud market dominance under the DMA framework.
• September 2025: OVHcloud and other European providers file a formal complaint urging the Commission to designate Azure and AWS as gatekeepers.
• June 25, 2026: European Commission officially designates Azure and AWS as gatekeepers under the DMA.
• December 25, 2026: Deadline for Azure and AWS to submit detailed compliance plans.
• June 25, 2027: Full compliance deadline—Azure and AWS must implement all DMA obligations.

Chart: EU Cloud Market Share by Provider (2025, estimated)

• AWS: 35%
• Azure: 30%
• Google Cloud: 10%
• OVHcloud: 5%
• T-Systems: 4%
• Others: 16%

Note: Market share estimates based on Synergy Research Group data for 2025, adjusted for EU-only revenue.

Article Summary

• The DMA's application to cloud infrastructure is a structural shift, not a temporary compliance issue—it will permanently reduce hyperscaler margins in Europe.
• European cloud providers like OVHcloud and T-Systems now have a regulatory moat that can be monetized through premium "DMA-compliant" cloud offerings.
• Google Cloud is the stealth winner, positioned as the compliant alternative without gatekeeper obligations, and will capture migration flows from regulated industries.
• Microsoft faces the most acute threat because its licensing bundling is the core of its cloud profitability—unbundling could cost it €2–3B annually in EU revenue.
• The divestiture threat in the DMA is a nuclear option that will force Amazon to consider structural separation of its EU cloud operations, a move that would reshape global cloud competition.