Digital ecosystems—networks of interconnected digital platforms, services, and stakeholders—have emerged as a dominant paradigm in the modern economy[1]. Platform-based business models, wherein a central “platform” facilitates interactions among multiple user groups, are fueling a vast array of commerce and innovation exchanges[2]. In the United States, tech giants like Amazon, Microsoft, and Google have nurtured these ecosystems, powered by cloud computing as a foundational technology[3].
Cloud computing provides on-demand processing power, data storage, and software services that enable platforms to scale quickly, reducing entry barriers for new digital businesses[4]. This study explores the growth of digital platform ecosystems in the U.S., paying particular attention to the role of cloud computing. It then examines salient policy considerations—data privacy, antitrust, and critical infrastructure oversight—that have arisen as policymakers confront the influence and potential risks of dominant platforms.
Defining Digital Platforms and Ecosystems. Digital platforms are multi-sided frameworks that connect distinct user groups, enabling direct interactions or transactions[2]. They harness network effects, meaning the platform gains value as more users adopt it. An ecosystem evolves around each platform, encompassing complementors (e.g., developers, third-party vendors), end users, and a governance structure set by the platform itself[5]. The platform orchestrator can impose rules and standards that effectively govern how ecosystem participants interact[6]. These features differ markedly from traditional one-sided businesses, as platforms’ success hinges on nurturing a vibrant network of participants.
Cloud Computing as an Enabler. Over the past decade, cloud computing has become the cornerstone of digital ecosystems[4]. By delivering computing resources over the internet on a pay-as-you-go basis, cloud services lower fixed infrastructure costs, accelerate software deployment, and support global scaling[3]. Start-ups no longer need extensive capital outlays for data centers; they can “rent” capacity from Amazon Web Services (AWS), Microsoft Azure, or Google Cloud. This capability has fostered innumerable new platforms and services, in fields ranging from fintech to e-commerce[4]. As Kenney and Zysman observed, the “migration of algorithms and data to the cloud has created the infrastructure on which platform-based markets and ecosystems operate”[2, p. 63].
Platform Governance and Ecosystem Health. Research on platform ecosystems often underscores governance—the rules, standards, and strategies that orchestrators adopt to maintain ecosystem health[6]. This governance can fuel innovation (by encouraging third-party development) or stifle it (by over-policing ecosystem members)[5]. Companies such as Amazon and Microsoft simultaneously attract innovators to their cloud infrastructures and impose requirements that may limit how participants operate. While these practices can protect consumer experience and data integrity, they also raise questions about fairness and monopoly power[7,8]. These concerns have become increasingly salient in the U.S. context as regulators and policymakers scrutinize the vast influence of digital platforms.
Launched in 2006, AWS pioneered commercial cloud computing[9]. It quickly evolved into a robust innovation platform, hosting resources for start-ups, established enterprises, and public agencies[3]. AWS benefits from multi-sided network effects: as more customers adopt AWS for their cloud needs, more independent software vendors (ISVs) build on or integrate with AWS, attracting yet more customers[9].
By late 2024, AWS held around 30% of the global cloud infrastructure market, cementing its role as a quasi-utility for modern digital services[10]. Prominent cloud-based platforms—such as Netflix, Airbnb, and numerous others—depend on AWS’s elastic computing and analytics capabilities[10]. Nevertheless, AWS faces scrutiny from regulators. In 2021, the Federal Trade Commission (FTC) expanded an antitrust investigation into AWS, examining whether it uses market dominance to stifle competition or self-preference Amazon’s own services[7].
Introduced in 2010, Microsoft Azure is the second-largest cloud platform, with about 21% global market share by Q4 2024 [10]. By leveraging Microsoft’s existing user base—particularly enterprises that rely on Windows, Office, and other software—Azure organically grew a massive clientele [8]. It also cultivated a partner ecosystem: integrators, consultants, and third-party developers all extend Azure’s reach[11]. However, Azure has not been immune to antitrust debates. The FTC has investigated claims that Microsoft imposes higher fees and contractual barriers for running Windows or Office on non-Azure clouds, allegedly to discourage customers from multi-cloud or competitive offerings[7]. Critics argue such practices undermine competition and innovation in the broader cloud market[12].
As a later entrant, Google Cloud Platform (GCP) is a challenger, with around 12% global market share in late 2024[10]. GCP leverages Google’s strengths in artificial intelligence, data analytics, and open-source partnerships[13]. It has formed alliances with firms behind MongoDB, Elastic, and Redis to differentiate itself from AWS[13]. Despite its smaller share compared to AWS and Azure, GCP has rapidly expanded, appealing to clients who seek specialized AI tools or a “multi-cloud” approach[14]. Google also faces regulatory scrutiny, particularly linked to broader antitrust lawsuits over its search and advertising businesses[15]. GCP itself, however, is sometimes perceived as bolstering competition by offering an alternative to the AWS–Azure duopoly[13].
The following table and figure illustrate the distribution of global cloud infrastructure market share in Q4 2024, highlighting the dominance of AWS and Azure, and the relative positioning of Google Cloud.
Table 1. Cloud market share (Q4 2024)
Figure 1. Cloud infrastructure market share (Q4 2024)
U.S. digital ecosystems rely heavily on user data, raising vital privacy and security concerns[16]. Unlike the EU’s General Data Protection Regulation (GDPR), the United States lacks a unified federal privacy law[16]. Instead, it depends on a mosaic of state-level and sector-specific laws (such as California’s Consumer Privacy Act for residents or HIPAA for health data). Cloud providers must navigate this legal patchwork while ensuring robust data protection. This challenge deepens when considering cross-border data flows. The 2018 U.S. CLOUD Act, for instance, empowers law enforcement to compel U.S.-based providers to disclose data stored abroad, straining international diplomacy[17].
From a security perspective, a breach or outage in a major cloud provider can reverberate across thousands of dependent businesses[12]. Consequently, policymakers and federal agencies increasingly treat big cloud platforms as part of the critical infrastructure ecosystem[12,18]. Reports by think tanks and government bodies urge more stringent oversight, incident reporting requirements, and potentially stress tests for resilience[18]. The question is whether regulations can be shaped to mitigate systemic risks without smothering the benefits of on-demand cloud scaling.
U.S. antitrust authorities, including the FTC and the Department of Justice (DOJ), have heightened their scrutiny of dominant digital platforms[8]. The House Judiciary Committee’s 2020 investigation concluded that Amazon, Apple, Facebook (now Meta), and Google hold monopoly power in several digital markets, recommending reforms to prevent self-preferencing and exclusionary practices[15]. In cloud services, antitrust enforcers focus on potential “lock-in.” For example, proprietary tools or licensing terms can make it cumbersome for customers to switch from AWS to Azure or GCP, or vice versa[12]. Such lock-in reinforces incumbents’ market power and possibly deters new entrants.
There is also debate on whether large cloud providers should be treated as essential facilities, similar to utilities in network industries[7]. If regulators adopted this concept, they might mandate open access or fair licensing, analogous to how telecommunications or electricity markets are regulated. Critics counter that the fast-evolving nature of cloud technology does not neatly fit these utility regulations and that heavy-handed oversight could hamper innovation[8]. Nevertheless, the impetus to reexamine antitrust tools—particularly around vertical integration and bundling—remains strong in Washington, D.C.[7].
With so much economic activity dependent on cloud services, the failure or compromise of a single provider risks cascading disruptions[12]. Such concentrations of risk have not gone unnoticed by policy experts. For instance, Azure, AWS, and GCP host sensitive government data, including for the Department of Defense and intelligence agencies[19]. In response, the U.S. government has instituted programs like FedRAMP (Federal Risk and Authorization Management Program), establishing baseline security standards for cloud providers that serve federal agencies[20]. Policymakers now weigh additional measures, such as requiring more diversity in federal cloud contracts to avoid a single point of failure, or mandating formal risk assessments for large cloud providers similar to those in banking[12,18].
Meanwhile, cyberattacks on cloud infrastructure or foreign surveillance concerns have spurred discussions about “data sovereignty.” While full data localization is not a primary U.S. policy (unlike in some countries), agencies increasingly question how to ensure platform resilience, data integrity, and chain-of-custody controls[12]. The broader policy issue is whether to treat dominant cloud operators as regulated utilities (akin to energy or telecom) or to continue with a more decentralized, market-driven approach.
Critics of tough new regulations warn that they could stifle innovation. Cloud-based ecosystems can spur entrepreneurship, as new ventures can quickly deploy services without massive upfront costs[1]. The result is a burst of creativity in fields from e-commerce to digital health, with cloud-native start-ups introducing novel solutions[4]. Additionally, the platform model can aggregate large developer communities, stimulating the co-creation of applications and complementary services. Proponents of a lighter regulatory touch argue that this dynamism might be compromised if regulatory constraints force providers to lower integration or restrict new functionalities[8].
Nevertheless, there are claims that large platforms can overshadow smaller innovators, creating a so-called “kill zone” around their core businesses[15]. For instance, Amazon may replicate a third-party’s successful cloud software, bundling an Amazon version at a lower cost. Investors might thus shy away from funding direct competitors, curbing capital flow for new businesses[15]. One policy idea is to require data portability and system interoperability to lower entry barriers, so entrepreneurs can port their users or apps more easily to alternative clouds or platforms[7]. Another is to strengthen merger oversight, especially if a giant platform aims to acquire a young rival. Balancing these tensions—encouraging innovation while preventing excessive dominance—lies at the heart of the ongoing U.S. platform governance debate.
Table 2 summarizes the principal cloud-related policy concerns in the U.S., along with the most prominent regulatory proposals currently under discussion.
Table 2. Key U.S. cloud policy concerns and responses
The path to comprehensive legislation on digital platforms remains uncertain. While the EU has advanced sweeping policies such as the Digital Markets Act, U.S. Congress has been slower to enact equivalent rules[1]. Instead, incremental measures and enforcement actions dominate the policy landscape. Recent or prospective changes include:
Digital ecosystems built around platform-based business models are now integral to the U.S. economy, and cloud computing serves as their backbone. Companies like Amazon, Microsoft, and Google have exploited the elasticity and scalability of the cloud to become de facto gatekeepers in multiple digital markets[3,10]. Their orchestration of ecosystems creates efficiencies and fosters innovation, but also raises concerns about data privacy, vendor lock-in, and systemic risk. As policymakers consider how best to regulate these platforms, they face the challenge of protecting competition and consumer rights without inhibiting the dynamism that underlies tech-driven growth[1,7].
Looking ahead, the regulatory trajectory will likely combine intensified antitrust scrutiny with gradual expansions of privacy law and critical infrastructure oversight. The U.S. approach—focusing on case-by-case enforcement and voluntary codes—may persist unless landmark court decisions or legislative breakthroughs occur. Regardless, the central role of cloud computing in digital ecosystems is bound to amplify calls for transparent governance. Should a major cloud outage or data breach strike, pressures for stricter regulation would intensify, prompting policymakers to treat cloud incumbents increasingly like public utilities. Striking the right balance between a robust, open environment for innovation and appropriate checks on market power remains the critical challenge. The outcomes of this policy discourse in the coming years will shape how U.S. digital ecosystems continue to develop and influence global standards for platform governance.
