The European Commission is running two parallel tracks on cloud computing that together represent the most significant regulatory pressure on hyperscaler dominance in Europe since the cloud market matured.
On the competition front, the Commission has opened formal market investigations under the Digital Markets Act into Amazon Web Services and Microsoft Azure. On the procurement front, it has awarded a sovereign cloud tender worth up to €180 million to four European providers: STACKIT, Scaleway, Post Telecom, and Proximus.
The DMA investigation
The Digital Markets Act created a framework for designating large platform operators as “gatekeepers,” binding them to a set of interoperability, data portability, and fair practice obligations. The threshold criteria for gatekeeper designation include minimum revenue, user numbers, and market position metrics. AWS and Microsoft currently do not meet those thresholds for their cloud computing services.
The European Commission has decided to investigate anyway, citing the need to assess whether the DMA’s existing rules should be updated to account for conditions in the cloud market. Specifically, the investigations examine whether AWS and Microsoft have created structural switching costs through egress fees, licensing restrictions, and bundled service advantages that lock public sector and enterprise customers into their platforms.
The investigations are expected to conclude by November 2026. If the Commission concludes that either provider meets the gatekeeper criteria for cloud, they would have six months to achieve compliance with DMA obligations. Those obligations include prohibitions on self-preferencing, requirements to provide interoperable access to infrastructure, and restrictions on combining data across services without customer consent.
The sovereign cloud contract
Separately, the Commission awarded a six-year cloud services tender to provide infrastructure for EU institutions, bodies, offices, and agencies. The four winning providers are all European: STACKIT, which is the cloud arm of the Schwarz Group (owner of Lidl and Kaufland), Scaleway, which is part of Iliad Group, Post Telecom, which is the Luxembourg national postal operator’s cloud unit, and Proximus, the Belgian telecoms operator.
The contract is worth up to €180 million and is explicitly framed as a digital sovereignty measure, reducing the exposure of EU institutions to regulatory and jurisdictional risks associated with US-based cloud providers operating under US law, including the Cloud Act.
France’s move of the national Health Data Hub from Microsoft Azure to Scaleway earlier in 2026 is the clearest national-level example of the same trend: public sector organisations re-evaluating their cloud posture in light of data sovereignty concerns and choosing European alternatives where they can.
What this means for organisations using AWS and Azure in Europe
The DMA investigations do not create immediate compliance obligations for cloud customers. But they are likely to change the commercial and technical landscape over the following 12 to 18 months.
If AWS or Microsoft are designated as gatekeepers, customers will gain formal rights to portability and interoperability that currently exist only as contractual possibilities subject to commercial negotiation. Egress fees, which currently create a significant cost barrier to moving workloads between providers, are a likely target for DMA intervention.
In the medium term, the direction of EU cloud policy is clear: the Commission wants European public sector bodies and critical infrastructure operators to use European cloud providers where technically feasible, and it is building both the legal pressure and the procurement framework to accelerate that shift.
For organisations currently running workloads on AWS or Azure, this is a reasonable moment to review architecture decisions that were made when European provider alternatives were less capable than they are today. STACKIT, Scaleway, Hetzner, and OVHcloud have collectively closed most of the managed service gap with hyperscalers for standard workloads, and are operating under purely European legal jurisdiction.
If you want to assess whether your current cloud architecture creates unacceptable regulatory or commercial lock-in risk, evaluate European provider alternatives for specific workloads, or design a hybrid strategy that keeps critical data under European jurisdiction while retaining hyperscaler services where they provide genuine advantages, contact Excello Digital. We help European organisations make cloud decisions that hold up under both technical scrutiny and regulatory change.