Policy Brief: Cloud computing and the Digital Markets Act
The European Commission has finally designated Amazon and Microsoft as cloud gatekeepers under the Digital Markets Act (DMA). It can now bring the full force of its most important digital markets regulation to bear on what is fast becoming the most strategically significant digital markets – or can it?
In a new policy brief, the Open Markets Institute makes the case for urgent updates to the DMA to ensure it can meaningfully tackle cloud concentration. Without such changes, the newfound determination to break apart the cloud oligopoly is likely to make little difference.
At the time of the DMA’s drafting, legislators were primarily focused on consumer platforms, notably social media sites, app stores, operating systems, and search engines. This has resulted in rules that are unable to fully address the cloud sector and the anticompetitive practices that characterise it.
The DMA is a key part of the toolkit Europe needs to free itself from the grip of the cloud hyperscalers – but without changes, it will be unable to deliver.
The brief, authored by George Colville, systematically evaluates the DMA’s obligations in light of the features and behaviours that define the cloud sector and prevent it from becoming a competitive market compatible with Europe’s digital sovereignty goals.
It recommends a number of amendments:
Expand Article 5(2)’s prohibition on the non-consensual processing, combination and cross-use of personal data to also include non-personal data.
Strengthen Article 5(8) by extending its scope to cover additional, economically equivalent forms of bundling, and extending the restriction beyond core platform services.
Extend Article 6(5) beyond ranking-related conduct to cover functionally equivalent forms of self-preferencing (pricing, contractual, and technical).
Extend Article 6(7) to allow the imposition of interoperability requirements for cloud services.
Extend the FRAND obligation in Article 6(12) to cover cloud services.
This brief builds on the Open Market Institute’s previous work studying the cloud market in its report “Engineering the Cloud Commons” and its European policy brief “Taming the hyperscalers”.
Through careful legal analysis, this brief demonstrates how the DMA, in its current form, is not fit for the purpose of helping Europe free itself from cloud hyperscalers. It builds on the Open Market Institute’s previous work studying the cloud market in its report “Engineering the Cloud Commons” and its European policy brief “Taming the hyperscalers”.
The principles built into the DMA are ready for the cloud; their expressions in its current legal text are not. This brief shows how to fix that.