This week, 25 Republican lawmakers urged President Donald Trump to open trade investigations into the European Union’s (EU) “anti-competitive acts, policies, and practices” of “economic extraction and regulatory coercion against American firms.” Their letter specifically cited the European Commission’s effort to single out Amazon Web Services (AWS) and Microsoft Azure for “gatekeeper” treatment under the Digital Markets Act (DMA), warning that subjecting both companies to the DMA would impose “unprecedented regulatory burdens that European and Chinese cloud competitors would not face.”

The Republican lawmakers are right. Last month, I argued in The Center Square that Europe’s digital rulebook constrains American technology firms without democratic accountability and that Washington should be prepared to respond. The proposed gatekeeper designations of AWS and Azure supply the clearest illustration of this pattern.

The Commission has yet to issue a final decision, but its reasoning is already indefensible.

Start with what the Commission concedes: AWS and Azure do not meet the DMA’s quantitative thresholds, the benchmarks that ordinarily trigger gatekeeper status, forcing it to reach for Article 3(8). Article 3(8) lets the Commission designate a firm after a market investigation on purely qualitative grounds, including a “significant impact on the internal market,” an “important gateway for business users to reach end users,” or an “entrenched and durable position.”

Until now, the Commission had never used Article 3(8) to designate a firm that falls below the DMA’s quantitative thresholds. It is now using the provision to pull American cloud services into a regulatory framework whose ordinary criteria leave them out. This is not a technicality. It is a confession that the framework does not fit, and that the Commission will apply it anyway.

The gatekeeper theory is also wrong on the facts. AWS has cut prices more than 100 times since 2006, and in June 2025 reduced On-Demand prices by up to 45 percent on the NVIDIA H100 instances central to AI workloads. Competition is also reshuffling market shares. In the first quarter of 2026, Synergy Research Group put AWS at 28 percent worldwide, Azure at 21, and Google Cloud at 14 — with Azure revenue up 40 percent and Google Cloud up 63 percent year over year. 

No provider approaches the 50 percent share that triggers a presumption of dominance under ordinary EU competition law. Flexera’s 2026 survey finds 87 percent of organizations spreading workloads across more than one environment — the opposite of the lock-in a “gateway” describes. Prices that fall, shares that move, and customers who keep their options open are the marks of rivalry, not of a bottleneck.

The legal defect runs deeper. The DMA’s gateway concept is built around intermediation, but cloud infrastructure does not intermediate between businesses and consumers the way an app store does. Applying it here stretches the DMA beyond its intended market, converting an ex ante regime with fixed, predictable triggers into open-ended administrative discretion. Teresa Ribera, the EU’s competition chief, invoked “their rights of defence and the rule of law” in announcing the decision. Yet the rule of law depends on predictable standards and due-process constraints. Market centrality alone cannot justify whatever obligations a regulator later chooses to impose.

American antitrust law recognized this danger long ago. In Verizon v. Trinko, the Supreme Court warned of “the uncertain virtue of forced sharing” and refused to convert market position into a duty to deal, reasoning that compelled access can blunt the incentive to invest. The DMA takes the opposite approach: upon designation, the two firms would face mandated data portability, anti-self-preferencing rules, and switching obligations on a six-month clock, with fines of up to 10 percent of global turnover.

Meanwhile, the largest American technology firms are expected to spend roughly $725 billion this year, up 77 percent, overwhelmingly on AI infrastructure. Regulating cloud as a static bottleneck at the dawn of the most dynamic technological transition in decades could weaken the incentives driving that investment.

This should embarrass Brussels. The Draghi report on European competitiveness identified regulatory burden as a central drag on European competitiveness; as Draghi observed, no EU company worth over €100 billion has been founded from scratch in fifty years, while all six American firms valued above €1 trillion were. Europe has no hyperscaler of its own. It is regulating a market it does not participate in. 

Just this June, Apple confirmed it would not bring its new Siri AI features to EU iPhones and iPads, citing the DMA. So far, the act’s clearest results are fines on Apple and Meta and delayed products for European consumers, while a European champion remains nowhere in sight.

The earlier fines were modest by comparison. The cloud designation would reach into how American companies build and operate the infrastructure powering the AI economy.

Section 301 of the Trade Act of 1974 authorizes the U.S. Trade Representative to act against foreign practices that discriminate against American firms. The Commission can still reverse course before its final decision, expected by year’s end. If it does not, President Trump should heed the lawmakers’ call for decisive action and launch a Section 301 investigation.

Ashley Baker is executive director of the Committee for Justice.