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Why isn't Canada?David Eaves: The big three hyperscalers — Amazon, Microsoft and Alphabet — control more than 70% of the marketLast updated 58 minutes ago You can save this article by registering for free here. Or sign-in if you have an account.An Amazon Web Services Inc. office in Herndon, Virginia, U.S. Photo by Al Drago/Bloomberg filesThe European Commission in June moved to designate the world’s two largest cloud platforms, Amazon Web Services and Microsoft Azure, as “gatekeepers,” giving itself new powers to discipline the industry. The reason is worth understanding, because it is the same one that should worry Ottawa.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorIn Canada and Europe, the big three hyperscalers, Amazon.com Inc., Microsoft Corp. and Alphabet Inc., control more than 70 per cent of the cloud market. Everything from our banks and hospitals to the governments that serve us and the artificial intelligence every company is racing to adopt now depends on them.This has prompted two concerns in Brussels. First, the few United States companies that control the industry can be compelled by Washington to hand over data or cut off service. Second, the companies provide similar services but are not interoperable. Think of each provider as a railway running on its own gauge of track. Switching providers is so costly and so technically painful that it is, in practice, impossible.Breaking business news, incisive views, must-reads and market signals. Weekdays by 9 a.m.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Posthaste will soon be in your inbox.We encountered an issue signing you up. Please try againThe Canadian government experienced this firsthand. In 2025, Amazon abruptly closed seven warehouses in Quebec. The innovation minister at the time, François-Philippe Champagne, threatened to review Ottawa’s relationship with the company. His department said the federal government, which spends $155 million in cloud services annually, was “very reliant” on Amazon Web Services and disentangling the relationship would take years. The federal government, furious and paying full attention, not only failed leave Amazon, it signed $9.7 million in new contracts with the company a few months later, according to reporting by The Logic.This problem, and Europe’s approach to addressing it, almost exactly mirror the argument we made this spring in Parting Clouds, a report published by the Canadian Anti-Monopoly Project.Cloud companies are the new 21st-century utilities, as essential and as unremarkable as electricity. As a core part of the economy, they must be both reliable and low cost and sometimes global in scale. A domestic monopoly free to extract rents for worse service will not leave Canadians better off or more competitive. We need more than domestic options; we need a better market.The danger is overindexing on building or buying digital sovereignty. Prime Minister Mark Carney has tasked his new Major Projects Office with standing up a sovereign cloud. And the AI for All strategy announced in July made a $2-billion commitment to sovereign infrastructure and Canadian champions one of its goals.Given our southern neighbour’s behaviour, that instinct is understandable, but it risks having limited effect. The real goal should be to make all providers — Canadian and foreign — interchangeable, so that switching is cheap, quick and routine. Europe is now inching in that direction. Canada risks running the other way.What should Canada do instead? Three questions cut to the heart of it.First, will we follow Europe’s lead in disciplining this market? The Competition Bureau can treat the most punitive lock-in tactics for what they are — abuse of dominance. Chief among them are egress fees, the tolls that companies charge customers to move or access their own data off the platform. These are designed to make leaving expensive, even if there are better options. Brussels has put these in its sights. Ottawa can too.Second, because competition law is a finite tool, how do we gain leverage? The simplest lever is not regulation, but purchasing. Governments are among the country’s largest cloud buyers. They could choose to only accept bids built on the open standards the market has already accepted. Better still, they can partner with others because a bloc can enforce a standard more effectively than any single country.Carney has already tilted Canada toward Europe on trade and defence, even joining the EU’s defence-procurement program. Canada should press that bloc to align around a common cloud standard, starting with defence and advocating it through the North Atlantic Treaty Organization.Third, what public value do Canadians receive for public money spent on a sovereign cloud? Allocating billions of tax dollars for data centres that run proprietary services reshapes nothing; a domestic monopoly free to lock in clients and charge rents for worse service will not leave Canadians better off or globally competitive.That same money spent on the condition that the infrastructure be interoperable would do something far more valuable. It would seed the contestable market we actually want and set the terms every provider has to meet. Public money should buy more than Canadian flags on data centres; it should buy a market that works.There are good reasons to build at home and Canada should have sovereign capacity of its own. But if cloud computing is now a global utility, that capacity has to be interoperable with the world and competitive within it. Europe’s digital strategy is far from perfect, but it is right to pry this market open. Canada should follow suit.David Eaves is an associate professor at the Institute for Innovation and Public Purpose, University College London. Curtis McCord is a policy analyst at the Canadian Anti-Monopoly Project. Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.