ICLE Issue Brief Warns EU Cloud Plan Could Turn ‘Gatekeeper’ Into a Size Test
PORTLAND, Ore. (July 29, 2026) — The European Commission has not proven that Amazon Web Services (AWS) and Microsoft Azure qualify as gatekeepers under the Digital Markets Act (DMA), according to a new issue brief from the International Center for Law & Economics (ICLE).
The DMA targets digital services that function as commercial bottlenecks and hold entrenched positions. On June 25, the Commission reached the preliminary view that AWS and Azure meet those conditions.
The proposed designations would be the first to rely entirely on the DMA’s qualitative criteria. AWS and Azure fall below the law’s user-number thresholds, which supported every previous designation. The Commission must therefore prove each legal condition through evidence rather than statutory presumptions.
The issue brief, written by ICLE Director of Competition Policy Dirk Auer and Senior Scholar Lazar Radic, argues that evidence of revenue, investment, capacity, and economic importance are not sufficient to establish gatekeeper power.
“The Commission has shown that cloud computing is economically important,” Auer said. “It still must prove that each provider meets the DMA’s separate legal tests. Size cannot fill every evidentiary gap.”
The authors argue that current market data weaken the case that AWS and Azure hold entrenched and durable positions. AWS’ worldwide share of cloud-infrastructure services fell from roughly 32% in 2021 to about 28% in early 2026. Microsoft held about 21%, while Google Cloud reached 14%.
Specialized artificial intelligence cloud providers, known as neoclouds, have captured about 5% of the market, with five ranking among the world’s 30 largest providers. Cloud-infrastructure revenue grew 35% year over year to $129 billion in the first quarter of 2026.
“An entrenched market should display stable positions and weak entry,” Radic said. “AWS has lost share, Google has reached 14%, and neoclouds already account for about 5%. Those figures complicate any claim that today’s leaders are insulated from competition.”
Other evidence also points to continued rivalry. Quality-adjusted prices have fallen, customers commonly use several providers, and AWS, Microsoft, and Google have reduced fees for customers transferring data to competing services.
The brief also criticizes the Commission’s reliance on AWS and Azure’s combined share. The DMA requires each service to qualify individually. The Commission must also explain why it included Microsoft, with about 21% of the worldwide market, while excluding Google Cloud at 14%.
Any prediction that artificial intelligence demand or the difficulty of moving large datasets will entrench AWS and Azure must rest on specific, current evidence, the authors argue. The European Union General Court applied that standard in Meta Platforms, rejecting vague and hypothetical reasoning in a previous DMA designation.
The issue brief also identifies narrower regulatory options. The United Kingdom’s Competition and Markets Authority examined the same firms on a fuller record and chose voluntary commitments rather than gatekeeper designation. The European Union’s Data Act already addresses cloud-switching barriers, while the Commission is still studying whether the DMA’s existing obligations fit cloud services.
“The proposed designations will determine whether gatekeeper remains a distinct legal category or becomes another word for big,” the authors conclude.
The full issue brief can be downloaded here. To arrange an interview with Auer or Radic, contact R.J. Lehmann at [email protected].
About ICLE
The International Center for Law & Economics (ICLE) is a nonprofit, nonpartisan research center that promotes the use of law and economics methodology to inform public policy debates. ICLE produces academic research, policy papers, regulatory comments, and public commentary on a wide range of issues at the intersection of law, economics, and technology. For more information, visit laweconcenter.org.