Gatekeepers in the Cloud

Cloud computing is crucial to Europe, not only as a technology sector but as the foundation of the data economy. It underpins nearly every sector and enables leadership in emerging technologies such as AI. Yet Europe’s cloud market is dominated by a small number of very large overseas hyperscalers. Structural barriers, including market fragmentation, limited access to capital, and unintended consequences of EU regulation, prevent many European cloud providers, particularly SMEs, from fully competing.Cloud computing is crucial to Europe, not only as a technology sector but as the foundation of the data economy. It underpins nearly every sector and enables leadership in emerging technologies such as AI. Yet Europe’s cloud market is dominated by a small number of very large overseas hyperscalers. Structural barriers, including market fragmentation, limited access to capital, and unintended consequences of EU regulation, prevent many European cloud providers, particularly SMEs, from fully competing.

In recent years, the Konrad-Adenauer-Stiftung has played an active role in addressing regulatory gaps and enforcement challenges related to digital gatekeepers. The underlying study by Antonio Manganelli represents our timely contribution to identifying workable solutions within the existing regulatory framework, namely the Digital Markets Act (DMA). The DMA was designed as a complement to competition law and aims to address structural market failures in the digital economy through ex ante regulation. Despite cloud computing services being explicitly listed as a core platform service, the regulation has remained largely inoperative in this sector.

This policy paper examines why the Digital Markets Act (DMA) has struggled to apply to cloud markets, identifying a structural and regulatory mismatch between its platform-based design and the realities of cloud computing. It proposes new approaches to designation, focusing on cloud marketplaces and ecosystem dynamics. The study also outlines a forward-looking regulatory framework centred on cloud neutrality, data access, and fairness. By bridging legal design and market reality, it aims to provide practical guidance for the European Commission and other enforcement agencies to ensure enhanced contestability and fairness in the cloud economy.

Without a competitive cloud sector, the European Union cannot achieve its objectives of digital sovereignty. With this publication, released on the occasion of the European Data Summit in Berlin, we aim to provide meaningful support to the work of the European Commission and other enforcement authorities across Europe.

Read the entire study: ‘Gatekeepers in the Cloud – Integrated Intermediation, Indirect Ecosystem Capture, and the Case for Cloud Neutrality’ here as a PDF.