The regulation of cloud computing: why the European Union failed to get it right

Cloud computing brings important benefits and it is expected to play a key role in facilitating the uptake of emerging technologies and applications, including artificial intelligence, blockchain, and high-performance computing. Despite its potential to deliver cost and time-efficient services, the majority of businesses in the EU have still not implemented cloud computing. This illustrates the need for a more widespread adoption of the technology. Yet, recent regulatory initiatives may obstruct the uptake of cloud services. This is arguably because such initiatives do not reflect a proper understanding of the market, which our paper intends to provide. To that end, the paper examines what cloud computing is and how it works. It subsequently discusses the EU’s attempts to regulate cloud computing, including the Digital Markets Act, the Digital Services Act, and the Data Act proposal. Our analysis demonstrates that the logic of these instruments and the obligations they establish do not fit the characteristics and workings of cloud computing. The paper concludes by noting that future regulation must mirror the specificities of the cloud, which has a value chain and traits that differ significantly from other digital services, most notably online platforms.