Europe’s cloud computing market remains firmly in American hands. Rather than fostering open competition that would give European startups and investors room to grow, the European Commission has chosen a strategy of regulatory pinpricks against U.S. technology companies. That strategy is now placing the cloud divisions of Amazon and Microsoft squarely in Brussels’s crosshairs.
The European Union stands on increasingly fragile geopolitical foundations. Through a combination of rigid regulation and ideological self-restraint, Europe has effectively removed itself from the defining strategic industries of our time. That is simply the sober reality. Whether in energy policy, geopolitical influence, or the industries that will define the coming decades — including digital technologies, robotics, automobiles, and advanced manufacturing — Europe is falling behind the United States, China, and, increasingly, India.
Rather than addressing these structural weaknesses, Brussels has responded by burying markets beneath ever-expanding layers of regulation. The Digital Markets Act (DMA) has become the Commission’s principal legal instrument for doing so. Operating within broad interpretive gray areas, the law has increasingly been deployed against America’s leading technology companies.
Most recently, Amazon Web Services and Microsoft Azure have found themselves under the DMA’s microscope. The European Commission has launched investigations to determine whether the dominant market positions of the two cloud providers amount to quasi-monopolies. Today, countless European businesses rely on Amazon and Microsoft to operate administrative systems, research infrastructure, and much of their digital operations through cloud-based services. (RELATED: American Tech Is Under Siege in Europe)
According to the Commission, this degree of market concentration creates dependencies that can no longer be viewed as merely a normal outcome of competition. Instead, Brussels argues that the concentration raises concerns involving security, innovation, and industrial policy. Should the DMA ultimately apply, both companies would face substantially stricter regulatory obligations.
Since November 2025, the Commission has formally investigated whether Amazon Web Services and Microsoft Azure should be designated as so-called “gatekeepers” under the Digital Markets Act. Preliminary findings reportedly point toward exactly that outcome. Although the final decision has not yet been announced, all indications suggest that both companies will soon fall under the DMA’s full regulatory regime. (RELATED: The Delusional Policies of the EU Nomenklatura)
There is, of course, another path available to policymakers. Governments could choose to liberalize markets, reduce regulatory burdens, and create an attractive environment for investors, entrepreneurs, and highly skilled professionals. Such reforms would help narrow the enormous competitiveness gap separating Europe’s economy from those of the United States, China, and much of Asia.
But pursuing such a strategy would require something Europe’s regulatory establishment has little interest in doing: surrendering power. After all, the influence of modern bureaucracies rests largely on rulemaking, administrative control, and the extraction of economic resources.
Regulatory institutions almost never choose to limit themselves voluntarily. History offers few examples of bureaucracies willingly reducing their own authority. Political control naturally expands whenever meaningful institutional constraints are absent.
With both the Digital Markets Act — which targets the market power of major digital platforms — and the Digital Services Act, which governs online content moderation, the European Commission has created a legal framework capable of imposing enormous financial penalties on technology companies. (RELATED: Europe’s Speech Crackdown Is Crossing the Atlantic)
The Commission has discovered that aggressive enforcement against large American technology companies serves not only political objectives but also provides an attractive new source of revenue.
One could describe it another way: Brussels has discovered a lucrative new business model. Over the past several years, America’s largest technology firms have repeatedly found themselves writing increasingly large checks to European regulators. What is presented as consumer protection often resembles something quite different — a combination of regulatory ambition and fiscal opportunism that has generated growing resistance in Washington while further straining transatlantic relations.
Meta became one of the Commission’s most prominent targets last year after receiving a €200 million fine for alleged violations of European digital rules. Apple was also ordered to pay €500 million for DMA-related violations.
Another widely publicized case involved Google. The Commission accused the company of using exclusivity clauses in the online advertising market that allegedly prevented websites from placing competing advertising services on equal footing alongside Google’s own offerings. The resulting €1.49 billion fine represented one of Brussels’s most visible demonstrations of regulatory muscle directed at Washington.
Although that particular penalty was later overturned by European courts, the broader trend remains unmistakable. The Commission has discovered that aggressive enforcement against large American technology companies serves not only political objectives but also provides an attractive new source of revenue.
The classical liberal economist Friedrich August von Hayek would likely view today’s widening intellectual divide between Brussels and Washington with profound concern. Hayek understood a healthy economy as a discovery process — an environment in which decentralized decisions, spontaneous order, entrepreneurial experimentation, and open competition generate innovation and prosperity.
Modern European bureaucracy represents precisely the opposite philosophy. It increasingly defines itself through regulation, restriction, supervision, and extraction.
When governments substitute regulation for innovation, they drive away both capital and talent while suffocating the entrepreneurial spirit that depends upon freedom and flexibility. Nor is the argument that ever-expanding regulation is necessary to dismantle monopolies especially convincing. Competitive markets have consistently demonstrated that extraordinary profits inevitably attract entrepreneurs, investors, and challengers eager to attack dominant incumbents.
The claim that governments must continuously expand their regulatory authority in order to preserve competition ultimately collapses under the evidence of how markets actually function. It is, in the end, a political fiction masquerading as economic necessity.
READ MORE from Thomas Kolbe:
Booming Data Economy: Brussels Regulates Innovation to Death
