Google, Microsoft and Amazon may have more problems in Europe

The European Union (EU) is reportedly preparing a major policy shift that could see American cloud giants like Microsoft, Amazon and Google sidelined from handling the bloc’s most sensitive government data. Citing officials familiar with the discussions, a report by CNBC claims that the European Commission is set to unveil a “Tech Sovereignty Package” on May 27 with a simple goal: to reduce Europe’s reliance on foreign technology and ensure that critical information, which includes health records, judicial files and financial data, stays under European control.

The proposed rules are reported to define specific strategic sectors that must use European cloud infrastructure. While US companies wouldn't be banned from government contracts entirely, their role would be strictly limited when it comes to “high-sensitivity” workloads.

“The core idea is defining sectors that have to be hosted on European cloud capacity,” a Commission official was quoted as saying.

Why now and role of digital sovereignty

The push for “digital sovereignty” has gained momentum as tensions with Washington have intensified, the report said, adding that European leaders are concerned about the 2018 US Cloud Act, which allows American law enforcement to request data from US companies even if that data is stored on European soil. To counter this, the EU is looking to bolster its own tech industry.

As per CNBC, the upcoming package is expected to include The Chips Act 2.0, which aims to boost local semiconductor production and The Cloud and AI Development Act (CADA) to encourage homegrown AI and cloud solutions.

A spokesperson for the Commission described the move as “Europe waking up and getting its act together.” The sentiment is already turning into action; earlier this year, France announced it would replace tools like Microsoft Teams and Zoom with a government-developed video conferencing tool called “Visio” by 2027.

Moreover, the EU recently awarded 180 million euros to sovereign cloud projects to ensure that institutions have European-made alternatives for their digital needs.