The European Union (EU) is reportedly considering implementing regulations that would limit its member governments’ use of U.S. cloud providers for managing sensitive data.
The European Commission, the executive arm of the EU, is readying its “Tech Sovereignty Package” for presentation on May 27. This package is expected to include strategies to bolster the bloc’s strategic autonomy in key digital sectors, CNBC reported on Thursday.
Part of this package involves discussions within the Commission about minimizing the exposure of sensitive public-sector data to cloud platforms offered by non-EU companies, as per two Commission officials who chose to remain unnamed.
The officials disclosed that the main proposal is to pinpoint sectors that must be hosted on European cloud capacity. This could potentially impact companies offering cloud solutions from third countries, including the U.S. According to the report, discussions are ongoing and have not been finalized.
However, the proposals would not fully exclude foreign cloud providers from government contracts. Instead, they would restrict their use for processing sensitive data in public sector organizations, depending on the classification and sensitivity of the information involved.
The report further stated that the discussions do not involve private-sector companies, and the “Tech Sovereignty Package” would not propose rules about their use of cloud platforms.
The European Commission did not immediately respond to Benzinga‘s request for comments.
EU Tightens Scrutiny On Big Tech
This development comes in the wake of the EU’s increasing scrutiny of tech giants.
In December, the Italian Competition Authority imposed a fine of €98.6 million ($115.53 million) on Apple Inc. (NASDAQ:AAPL) for alleged abuse of its dominant position in the mobile app market.
The same month, the European Commission launched antitrust investigations into Meta Platforms Inc. (NASDAQ:FB) and Alphabet Inc. (NASDAQ:GOOGL) over concerns about their business practices.
Amazon.com (NASDAQ:AMZN), Google and Microsoft Corp. (NASDAQ:MSFT) collectively accounted for 70% of the European cloud market in Q4 2025, according to Synergy Research, meaning the EU's push to regulate major U.S. tech firms could significantly affect their operations.
EU public sector bodies currently rely heavily on foreign, mainly U.S.-based, cloud providers to handle sensitive data like health and financial records, as long as regulatory rules are followed.
However, concerns have increased due to the U.S. Cloud Act of 2018, which allows American authorities to access data held by U.S. companies even if it is stored in Europe. In response, EU governments are exploring domestic and open-source alternatives and increasing spending to strengthen digital sovereignty.
US-EU Tensions Rise Under Trump
Strained transatlantic relations in the second term of the Trump Administration could also be a major reason for the EU moving away from U.S. big tech.
President Donald Trump has repeatedly expressed his dissatisfaction with Europe and NATO members amid a perceived lack of cooperation.
Last week, Trump said that the EU was violating a trade agreement and announced plans to impose 25% tariffs on European automobiles and commercial vehicles. The president also announced the withdrawal of U.S. troops from Germany, subsequently, while hinting that Italy and Spain could be next.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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