Report - Taming the Hyperscalers
The Open Markets Institute has published a policy brief providing a blueprint for Europe’s transition towards an open, competitive, and sovereign cloud market.
Over the past year, the question of European digital sovereignty has moved from the fringes of political debate to the mainstream. At the heart of these discussions is the issue of Europe’s dangerous dependence on the cloud infrastructure of a handful of U.S. tech giants – Amazon, Google and Microsoft – and the risks that this dependence poses to the continent’s competitiveness, security and sovereignty.
While much of the European discourse has focused on the need to support local cloud alternatives, such efforts will be unsuccessful if they are not paired with a comprehensive strategy to break Big Tech’s chokehold on the market. The brief, authored by Max von Thun and George Colville, sets out a vision for an open cloud market and identifies the practical steps Europe needs to take to get there, with an emphasis on rigorous enforcement of existing laws including competition law, the Digital Markets Act, and the Data Act.
The proposed measures would restrict the ability and incentive of cloud incumbents to abuse their power over customers and rivals, while also creating new opportunities for alternative providers to emerge, innovate, and scale.
Policy recommendations for an open, competitive, and sovereign European cloud market
The brief outlines a number of practical measures to reform Europe’s concentrated cloud market, including:
Putting the DMA and Data Act to full use by:
Accelerating the designation of Microsoft Azure and Amazon Web Services as gatekeepers under the DMA, and launching a separate investigation into Google Cloud Platform;
Amending the DMA to ensure its obligations fully cover anti-competitive practices in the cloud market;
Imposing a formal fair, reasonable and non-discriminatory access (FRAND) obligation on cloud providers;
Facilitating private enforcement of both the DMA and competition law;
Establishing a centralised EU body to oversee the regulation of dominant cloud providers;
Moving towards the full ownership (or functional) separation of cloud computing from Amazon, Google and Microsoft;
This brief builds on the Open Market Institute’s previous work studying the cloud market in its report “Engineering the Cloud Commons”. It explores its implications for the European market and the existing European regulatory framework and demonstrates how, with sufficient political will, Europe can take control of its cloud infrastructure and ensure its benefits are distributed fairly.