Open Markets Submits Recommendations on Cloud and AI Development Act, Urges EU to Break Big Tech’s Cloud Monopoly
EUROPE - The Open Markets Institute has submitted a formal response to the European Commission’s proposed Cloud and AI Development Act, warning that the legislation will come up short, unless it directly confronts the dominance of Amazon, Microsoft, and Google over the global cloud computing market.
“Cloud infrastructure is now as essential to our economies as electricity or water,” said Max von Thun, Director of Europe & Transatlantic Partnerships at OMI. “Europe wouldn’t outsource its power grid to three foreign corporations—why accept that deal for the backbone of the digital future?”
OMI’s response argues that the Commission will only succeed in achieving its goals if it addresses the problem of market concentration in the cloud sector. Without doing so, the EU will not be able to ensure that digital infrastructure built over the coming years and decades serves the European economy and the European public interest. Not only does concentration result in high costs for European firms and consumers, but it harms European innovation and competitiveness, creates dangerous technological dependencies, weakens societal resilience, and undermines sovereignty and national security.
The real obstacle to Europe’s digital resilience is not red tape or lack of investment, but the structural power and anticompetitive behavior of entrenched U.S. tech giants. OMI’s consultation warns that without serious cloud governance reform, the Cloud and AI Development Act risks entrenching the very monopolies it should dismantle and undermining Europe’s ambitions for digital sovereignty in the process.
As OMI’s submission and report demonstrate, through an ambitious and well-designed set of regulatory and industrial policy interventions, the EU and other governments can tackle these dependencies and ensure that private cloud infrastructure serves the public interest.
These interventions should include:
Banning anticompetitive practices such as egress fees, anticompetitive tying and bundling of cloud products, unfair contracts and licencing terms, and artificial technical barriers that inhibit cloud switching and competition.
Mandating standardised data formats and interfaces to enable maximal data portability and seamless migration between cloud providers, reducing lock-in and facilitating market entry.
Imposing enforceable horizontal and vertical interoperability mandates, anchored in open standards, to strengthen customer choice, promote fair competition and unlock innovation.
Enforcing non-discrimination in cloud access and pricing, requiring consistent and transparent pricing to prevent the use of opaque pricing practices to lock in individual customers and undermine competitors.
Establishing a single marketplace for computing resources (IaaS) that enables price discovery, transparency, and fair competition between providers of cloud infrastructure.
Introducing capacity reporting obligations for cloud providers, including on compute capacity and emissions, to support sustainable planning and give policymakers a transparent view of the state of European compute infrastructure capacity.
Leveraging public procurement by prioritising open standards, open source, and interoperability in public cloud contracts. Furthermore, a proportion of public procurement budgets should be earmarked for non-dominant and particularly European providers satisfying these requirements.