EU takes bold step on path to tech sovereignty – with mixed results
Image: Henri Lajarrige Lombard @henri0019 via Unsplash
Europe has taken the most significant measures to date to wean itself off an unhealthy dependence on US tech.
Last week the European Commission unveiled its tech sovereignty package, which seeks to strengthen the bloc’s capacity in semiconductors, artificial intelligence, cloud and open source, and to cut its dependence on non-European – chiefly US and Chinese – technology providers.
The centre piece of the policy is the proposed Cloud and AI Development Act, which introduces mandatory non-price criteria for selecting vendors. The law creates a four-tier sovereignty risk assessment system for state tenders in sensitive sectors such as defence, banking, public health care and energy. The more critical a sector, the greater the requirement for tech services to be under EU ownership and control.
The framework will be mandatory for public contracts but the private sector will be encouraged to adhere to it too.
The new rules would effectively curb access to critical public tenders for cloud services and chip production in these sectors for US tech giants such as Google, Amazon and Microsoft. Together with an updated Chips Act, they will also streamline and incentivise job creation, chip manufacture, data centre construction (the aim is to triple capacity in seven years) and direct investment in R&D to encourage European tech firms to upscale production.
These targets could be considered wishful thinking, given the tech gulf that currently exists between the US and Europe.
Still, as Politico argues, Trump has given Europeans the push needed to take decisive action by making it impossible to ignore just how dangerous strategic dependence on US tech could be.
Warnings by big business in Europe that the drive to reduce reliance on US companies would harm profits, raise costs and damage competitiveness in the EU are now being weighed up against the geopolitical risk of having 70% of Europe’s cloud market controlled by three tech giants dependent on the Trump administration’s largesse. Politico points out Trump’s threats to annex Greenland, fears that he holds a kill switch over Europe’s internet and his decision to impose sanctions on ICC officials have pushed countries long resistant to imposing restrictions, such as Denmark and the Netherlands, into accepting the need to develop homegrown alternatives.
Another contributing factor was Microsoft’s admission that the US CLOUD Act empowers the US government to access data from European clients – with or without approval from their governments. That admission was made by Microsoft France’s director of public and legal affairs, Anton Carniauxd, in testimony before a French senate committee.
In fact France, whose Qwant search engine replaced Google at the European Parliament last week, has led the charge. In April it ordered all government ministries to ditch Windows for Linux. French AI company Mistral is constructing a 1.4GW data campus outside Paris, and last month Japanese conglomerate Softbank announced it was investing €75 billion to build a network of nuclear powered AI facilities in France. One hub would be sited in Dunkirk to service Amsterdam, London and Brussels.
Reaction to the EU sovereignty package has so far been mixed.
The FT’s innovation editor John Thornhill welcomed the balance it struck between “sensible measures” that encourage investment and innovation in AI, and shying away from igniting anther trade war with Trump by accepting “the brutal reality [that] Europe remains inextricably dependent on US technology”. Promoting a stronger open source ecosystem would also speed up AI adoption across industries, he adds, and help slash Europe’s €264 billion annual IT products and services bill paid mostly to US tech companies.
Some critics warn the package achieves neither aim. They point out the measures still leave large chunks of the European market open to the US tech giants, and blocking them from the most sensitive sectors would require political buy-in as the legislation still needs to be negotiated with 27 EU member states and be adopted by the European Parliament.
On the other hand, American businesses are already crying foul over protectionism, and Green politicians warn the lack of environmental protections will fuel a tech backlash in Europe similar to that building in the US.
