The EU targets two cloud giants! Amazon.com, Inc. (AMZN.US) AWS and Microsoft Corporation (MSFT.US) Azure face market dominance investigation.

The European Union has launched a market dominance investigation into Amazon.com, Inc.'s cloud service (AWS) and Microsoft Corporation's Azure in order to determine whether these two major cloud computing service providers should be subject to regulations aimed at restricting the market power of tech giants. The European Commission stated on Tuesday that these two companies "occupy a very strong market position" and will assess under the Digital Markets Act whether they "constitute important gateways between businesses and consumers." The institution also stated that it will examine whether the regulations aimed at curbing anti-competitive behavior can effectively address competition restrictions or unfair business practices in the cloud computing sector. The Digital Markets Act is set to take effect in 2023 with the aim of curbing market dominance behavior of global tech platforms through clear "positive lists" and "negative lists." As of now, the act has not had any impact on any major cloud service providers that have significant market share. The leading global cloud service providers are currently temporarily exempt from the regulations of the Digital Markets Act, mainly due to their business being conducted through enterprise contracts, making it difficult to accurately estimate the number of end users. However, "user scale" is one of the main criteria for designating services in Silicon Valley as requiring additional regulation by the EU. Under this investigation authorization, regulatory agencies will assess whether major cloud service operators should still take on a range of additional obligations even in cases where user numbers are difficult to quantify. These obligations may include improving interoperability with competing software, enhancing user data portability, and prohibiting tying and bundling sales practices. As the EU focuses its regulatory efforts on cloud platforms, the industry has recently experienced significant service interruptions, causing serious disruptions to global businesses and highlighting the risks of relying too heavily on a few service providers. Just last month, Amazon.com, Inc.'s 15-hour cloud service outage disrupted operations for hundreds of companies from Apple Inc. to McDonald's Corporation, Epic Games, damaging its reputation as a reliable cloud service provider. Microsoft Corporation's Azure also experienced technical failures in October, leading to Alaska Air Group, Inc. passengers being unable to check in and the voting system of the Scottish Parliament being paralyzed. The EU regulatory authorities stated that the new investigation into the market position of AWS and Azure is expected to be completed within 12 months. The European Commission plans to make a final decision within 18 months on how the cloud computing industry will be regulated under the Digital Markets Act. A spokesperson for Microsoft Corporation stated that the company is prepared to cooperate with the European Commission's investigation. A spokesperson for Amazon.com, Inc.'s AWS stated that they believe regulatory authorities will confirm that the cloud computing market offers ample choice and innovation.