The European Union is preparing to propose stricter criteria for cloud computing services participating in highly sensitive government tenders, a move that could potentially exclude U.S. tech giants Amazon, Microsoft, and Google from certain projects.
The proposal forms a key part of the European Commission's Cloud and AI Development Act, which EU tech chief Henna Virkkunen is set to unveil on Wednesday. The broader package aims to reduce the bloc's reliance on American technology providers while strengthening the position of European businesses.
The initiative is expected to face pushback from Washington and will require approval from the EU's 27 member states as well as the European Parliament in the coming months. The United States has previously criticized EU regulations designed to curb the influence of Big Tech and require platforms to better police illegal and harmful content.
Among the proposed criteria for selecting cloud vendors for critical government contracts are the level of data protection offered, the extent of third-country control over data and services, and whether the vendors' home markets are sufficiently open to foreign cloud service providers.
The Commission has also proposed acting as a central purchasing body for EU countries and institutions, enabling them to procure data center services, cloud computing services, software, and AI systems through a coordinated framework.
The draft legislation further outlines a streamlined approval process for data centers. Facilities that use European-made chips or adopt measures to reduce energy consumption could benefit from preferential grid access and lower network charges.
Last week, Reuters reported that the proposed Chips Act 2.0 package would expand eligibility for state funding to a wider range of companies operating in strategic technology sectors.
Despite concerns over digital sovereignty, U.S. cloud giants Amazon, Microsoft, and Google continue to dominate the global cloud computing market, collectively accounting for more than 60% of worldwide market share.
To address European sovereignty and data security concerns, the companies have introduced region-specific initiatives. Amazon recently launched a cloud service that is hosted entirely within Europe and operates independently of its global infrastructure from both a legal and physical standpoint.
Microsoft has pursued a similar strategy through locally governed cloud ventures, including Bleu in France—owned by Capgemini and Orange—and Delos Cloud, an SAP subsidiary that runs on Microsoft Azure infrastructure.
Google, meanwhile, has sought to maintain access to sensitive European cloud contracts through S3NS, a cloud joint venture controlled by Thales, as well as a separate partnership with French cloud provider OVHcloud.
( With Inputs from Reuters)
