The European Union intends to fundamentally reshape the rules of the game in the cloud technology market to reduce critical dependence on American tech giants. The European Commission (EC) has prepared a legislative bill that could bar corporations such as Google, Amazon, and Microsoft from accessing government tenders in strategically important economic sectors.

The document, titled the "Cloud and AI Development Act," will be officially presented to the European Parliament on June 4. The initiative aims to protect EU sovereignty and minimize risks associated with storing data on servers controlled by foreign jurisdictions.

Protecting Strategic Sectors

The essence of the European Commission's proposal lies in introducing strict requirements for cloud service providers participating in public procurement. Primarily, restrictions will affect sectors such as energy, banking, and healthcare. These industries are considered critical for national security and the stable functioning of member states.

The key criterion for tender eligibility will be the degree of control third countries have over data and provider services. Brussels plans to make the use of software and hardware developed directly within European Union countries mandatory. This decision could significantly complicate participation in strategic procurement for major American companies, which currently control more than 60% of the global cloud services market.

Response to the American Cloud Act

The European Commission's initiative is a direct response to geopolitical and legal challenges, specifically the American CLOUD Act. This regulatory act allows US authorities to demand that American companies provide access to user data, even if the servers where this data is stored are physically located outside the United States.

European regulators fear that if American cloud platforms are used, data belonging to European citizens and government bodies could become accessible to US intelligence agencies without the knowledge of European authorities. The new bill aims to create a legal barrier guaranteeing that critical information remains under the full control of the European Union.

Context of Digital Regulation

The cloud technology bill fits into a broader EU strategy to reduce dependence on the US technology sector. In recent years, Brussels has consistently implemented a regulatory framework limiting the monopoly of American platforms:

  • Digital Markets Act (DMA): regulates competition in digital markets and prohibits unfair practices by dominant players.
  • Digital Services Act (DSA): holds online platforms accountable for content posted by their users.

Furthermore, the European Commission regularly initiates antitrust investigations against tech giants. In particular, as reported by the German newspaper Handelsblatt, the EC plans to fine Google hundreds of millions of euros for violating the DMA. This concerns search result ranking practices that unfairly favored the corporation's own services.

New Rules for Data Centers

In addition to restrictions on American providers, the bill provides incentive measures for developing its own infrastructure. The document introduces new accelerated procedures for approving the construction of data centers within the European Union. This should contribute to the growth of the local industry and the creation of a competitive alternative to foreign solutions.

However, the fate of the document remains uncertain. It is currently unknown whether the bill in its current form will receive unanimous support from EU countries and the European Parliament, considering economic interests and the complexity of transitioning to European platforms.