EU Expands Digital Markets Act to Target Cloud and AI

The European Commission said Wednesday it will extend the focus of the Digital Markets Act (DMA) — its landmark Big Tech competition law — to cover cloud services and artificial intelligence. The shift, regulators said, is aimed at making both sectors "fairer and more contestable."

The announcement is a meaningful escalation. Until now, DMA enforcement has focused on consumer-facing services: app stores, search, social networks, messaging. Cloud and AI sit deeper in the stack — they're the infrastructure that powers nearly every other digital product — and bringing them under the DMA framework changes the regulatory math for the largest AI labs and hyperscalers operating in Europe.

Context: What the DMA Already Does

The Digital Markets Act, which became applicable in May 2023, designates certain large platforms as "gatekeepers" and imposes specific obligations on how they operate. The current gatekeeper list includes Alphabet, Amazon, Apple, Booking.com, ByteDance, Meta, and Microsoft.

For designated companies, the DMA requires interoperability between messaging apps, prohibits self-preferencing in marketplaces, mandates data portability, and limits how user data can be combined across services. Penalties for violations run up to 10% of global revenue — and 20% for repeat offenses.

The Commission says the regime has produced measurable results in the markets it currently covers. App store policies have loosened. Search rankings have become more open. Default browser and messenger choices on mobile devices have changed.

What's New

The Commission's announcement Wednesday signals two specific extensions:

Cloud services. EU regulators will examine whether the major hyperscalers — Amazon Web Services, Microsoft Azure, and Google Cloud — wield enough market power to be regulated as gatekeepers in cloud infrastructure. EU competition officials have been investigating Amazon and Microsoft's cloud dominance for more than a year, with a particular focus on egress fees, software licensing terms, and bundling practices that allegedly lock customers in.

AI services. The Commission said it will assess whether certain AI services — particularly virtual assistants and chatbots — should be classified as "core platform services" under the DMA. If designated, those services would inherit the existing gatekeeper obligations. The framing on virtual assistants is notable: it implicitly puts ChatGPT, Gemini, Claude, Copilot, and Meta AI into the same regulatory bucket as search engines and app stores.

Importantly, the Commission emphasized that no new legislation is required for these expansions. The DMA was deliberately drafted to be "future-proof," and the framework allows new core platform services to be added as the digital landscape evolves.

Industry Impact

For the U.S. hyperscalers, the cloud designation prospect is the bigger near-term concern. AWS and Azure together control more than half the global cloud infrastructure market, and a DMA gatekeeper designation would force structural changes — likely including more permissive data egress terms, tighter limits on bundling Microsoft 365 with Azure services, and new interoperability requirements between cloud providers.

For the AI labs, the virtual assistant question is where things get interesting. A DMA designation for ChatGPT or Gemini would mean obligations that don't exist anywhere else in the world: portability of user conversations, interoperability with other assistants, prohibitions on self-preferencing other services within an assistant's responses. None of these are technically impossible, but each one would force product changes that frontier labs have so far chosen not to make.

For European AI companies, the reframing is mostly upside. Mistral, Aleph Alpha, and other EU-based labs have argued for years that the dominant U.S. assistants benefit from default integration into operating systems, browsers, and developer tools. DMA-style obligations would make it easier for European alternatives to compete on a level playing field.

What Regulators Are Saying

Brussels framed the move as a logical evolution rather than a new front. "The DMA was designed to be future-proof and adapt to emerging challenges, for example in AI and cloud," a Commission spokesperson said. The message: this isn't a new law, it's an existing law catching up to where the market has moved.

That framing matters because it changes the political and legal pathway. New legislation in Brussels typically takes years and requires support from the European Parliament and Council. Reinterpretation of the existing DMA is faster and largely an administrative process inside the Commission.

What's Next

The Commission has not published a formal designation for cloud services or AI assistants yet. Expect a public consultation phase to begin in the coming weeks, followed by formal market investigations. Realistic timeline for binding gatekeeper designations: 12 to 18 months.

In the interim, expect the targeted companies to begin pre-compliance work. Microsoft, AWS, and Google have all faced previous DMA designations and have institutional muscle for this kind of process. The newer entrants — particularly Anthropic, OpenAI, and xAI — will face it for the first time.

Watch for parallel U.S. responses. The Trump administration has been openly hostile to extraterritorial European tech enforcement, and a DMA designation that targets American AI labs is likely to draw a strong White House response. That tension was a feature of the original DMA enforcement cycle, and it's likely to be sharper this time.

Bottom Line

If you're running an AI product or cloud business in Europe, the regulatory frame just shifted. Decisions about market dominance, data portability, and interoperability that previously sat in the "future problem" bucket are now active. Companies that get ahead of the requirements will avoid 10%-of-revenue penalties; the ones that don't will spend the next 24 months negotiating remedies. Either way, "AI as a regulated platform" — not just AI as a regulated technology — is now the European baseline.