Breaking Barriers to Cloud Customer Choice: Unlocking Europe’s AI and Innovation Leadership

Cloud computing underpins digital transformation and is essential for unlocking the benefits of artificial intelligence (AI), automation, and scalable digital services. Yet Europe continues to lag behind global peers in both cloud and AI adoption. This underperformance is not merely technological; it is structural and it is costly. Without rapid progress, the EU risks missing out on over EUR 1.2 trillion in GDP gains across the private sector by around 2030. In the public sector alone, a shift to cloud particularly via a multi-cloud-first strategy could generate up to EUR 450 billion annually in efficiency and productivity gains across EU governments.

A major, yet under-recognised barrier is the lack of cloud customer choice, the ability for businesses and public sector users to freely select, combine, and switch between cloud services. Without this, users face high switching costs, vendor lock-in, and reduced capacity to scale or integrate AI tools effectively.

This paper asks: What are the main obstacles to cloud customer choice in the EU and what are the best avenues for advancing it? The analysis focuses on three key domains that shape the market at large – regulation, competition policy, and standard-setting bodies – examining how each can promote broader customer choice rather than be used narrowly to target individual, innovation-driven firms.

Policy Recommendations: A Dual Strategy for Advancing Cloud Customer Choice

To unlock the full benefits of digital transformation, Europe needs a dual-track strategy – combining quick wins with long-term reform:

1. Short-Term Opportunities 

Targeted actions to reduce friction, clarify rules, and support cooperation:

• For Competition Authorities: Step up case-by-case enforcement against lock-in practices that fall outside the DMA, including bundling and discriminatory licensing. To avoid legal overlap, ensure a clear separation between DMA enforcement and traditional competition law. Provide practical guidance on when API or architecture alignment is pro-competitive – supporting interoperability, switching, and the EU’s simplification goals.
• For Standard-Setters: Accelerate practical standards (e.g. via CWAs or ISO PAS), build formal ties with open-source communities, and issue FRAND guidance that distinguishes between service types to reduce uncertainty.
• For Regulators and Governments: Use procurement to demand multi-cloud compatibility and open licensing. Support SME participation in standardisation bodies, and issue practical guidance on fair contract terms to reduce legal ambiguity.

2. Long-Term Necessities

Structural reforms to align regulation and standardisation with openness and competition:

• For Competition Authorities: Continue to monitor systemic lock-in, while ensuring enforcement supports both proprietary and open-source innovation. Create legal certainty for pro-competitive cooperation on standards.
• For Standard-Setters: Institutionalise FRAND practices in governance frameworks and ensure alignment with global initiatives to promote interoperability and cross-border technology diffusion.
• For Regulators and Governments: Reform digital regulations to target real harms, not architectures. Redefine sovereignty as user freedom, not supplier nationality. Modernise public procurement to support multi-cloud-by-default – a shift that could unlock up to EUR 450 billion in annual public sector savings and productivity gains.