Europe closes the door to American clouds

The European Commission is preparing a legislative package called the "Tech Sovereignty Package" (TSP) that will restrict US tech giants from managing the most sensitive public sector data. The measure focuses on financial, judicial and health data. Brussels wants to strengthen the continent's digital self-sufficiency and reduce dependence on US companies' infrastructure in critical state institutions.

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The European Union is preparing for one of the most decisive steps towards digital independenceAccording to sources close to the European Commission, a new regulatory framework called the Tech Sovereignty Package (TSP) will be presented this month that will directly cut into the market share of American cloud giants such as Microsoft, Amazon and Google. Although these corporations currently control the lion's share of the world's data, Europe plans to create a sovereign cloud market where domestic providers will have the main say.

The essence of the new measure is to strictly limit the processing of specific types of data for public organisations. If the legislation is adopted as envisaged, foreign cloud service providers will no longer be allowed to manage sensitive information from the fields of healthcare, finance and justice. This means that European public institutions will have to find solutions within the borders of the European Union for storing and processing such records.

It is important to stress that these restrictions will not apply to the private sector. Private companies will continue to have complete freedom to choose the cloud platform for their proprietary data. However, the impact on US corporations will be significant, as public procurement represents a huge and stable part of the market. One of the Commissioners pointed out that the aim of the TSP package is to encourage the development of sovereign cloud solutions that will allow European companies to flourish and grow their institutional user base.

The reform of the public procurement market is also expected to bring greater diversity among AI and cloud service providers. A Commission spokesperson described the situation as “a Europe awakening” that is finally regulating its own species. This legislative push is complemented by other important acts such as the Cloud and AI Development Act (CADA) and the Chips Act 2.0. While the AI data center market in the US is expanding virtually unregulated, Brussels and Washington appear to be on an inevitable collision course over digital market rules.