analysis

Nov 11, 20256 mins

Efforts by the European Union to wrest control of its digital infrastructure from American cloud companies have become a flashpoint in the debate over sovereignty and innovation. The proposed European Cybersecurity Certification Scheme for Cloud Services (EUCS), with its controversial “sovereignty requirement,” is a bold initiative aimed at reducing Europe’s reliance on US-based hyperscalers such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud.

While this initiative highlights the EU’s desire for digital independence, it also underscores the broader challenge of balancing sovereignty with the advantages of technological advancements provided by global cloud leaders. From an American perspective, the conflict sends a message to US cloud providers and businesses that depend on them to adapt their strategies to succeed in a world where such policies might soon become common. For the EU, the battle over cloud sovereignty will only become more complex as it attempts to balance competing priorities.

An EU proposal for cloud sovereignty

Europe’s unease with the prominence of US cloud providers extends beyond worries about market share. The EUCS proposal, supported by France, Germany, Spain, and Italy, highlights concerns about US extraterritorial laws such as the CLOUD (Clarifying Lawful Overseas Use of Data) Act. The act empowers US law enforcement to compel US-based service providers (Microsoft, Google, etc.) to provide data regardless of where that data is stored—whether it’s in the US, Europe, or anywhere else in the world.

Such concerns underscore real risks related to sensitive government and private data, especially for critical infrastructure and strategic industries. Proponents of the sovereignty requirement argue that requiring certified providers to store, process, and manage data entirely within European jurisdiction—and to be European-owned—would eliminate vulnerabilities and strengthen the European cloud ecosystem.

However, the initiative has received as much criticism as support. Smaller EU countries, along with tech-dependent nations like Ireland and the Netherlands, have pushed back against the sovereignty clause, arguing that it smacks of protectionism and unfairly excludes American providers from competing on equal footing. These countries value US providers’ innovation, security, and technical excellence—areas where European cloud firms lag.

Ultimately, the deadlock highlights a bigger question: Can Europe afford to give up access to top-tier technological solutions to achieve its long-term goal of sovereignty? Is there a middle path that respects European independence while ensuring fair competition? The EU’s struggle highlights the complexity of large-scale cloud adoption and the challenges of reducing dependence on a few dominant hyperscalers.

Lessons for a fragmented world

From the US side, the rise of geopolitical and regulatory challenges, such as the EUCS, serves as a warning to hyperscalers that their dominance is not permanent, whether in Europe or elsewhere. Market fragmentation caused by protectionist policies highlights the need for cloud providers to be more flexible and adaptable.

Even American businesses using AWS, Microsoft, or Google are concerned about centralization. Some question whether heavy reliance on a single hyperscaler or geographic region is sustainable in the long term, as it introduces exposure to geopolitical conflicts, vendor lock-in, and restrictions on accessing innovative solutions outside the Big Three.

Nevertheless, viewing Europe’s situation solely as an opportunity or a source of competition for US firms would be a mistake. The EU’s scenario highlights a bigger, global challenge: decreasing reliance on a few major providers while promoting more diverse ecosystems.

Total sovereignty will take years

The EU faces a prolonged battle as governments realize that American hyperscalers dominate in services, scalability, and innovation, with billions invested in platforms that surpass European options in infrastructure, AI, and ecosystems. Many member states prefer US providers’ practical benefits over sovereignty concerns. Denmark, the Netherlands, and the Baltic states are opposed to strict sovereignty clauses.

Pushing for stricter sovereignty won’t fix Europe’s dependence. American providers offer “sovereign clouds” that comply with European laws but rely on US parent companies, showing market closure is futile without strong internal options. The EUCS faces years of regulatory battles and tech compromises as member states balance economic, legal, and strategic needs.

What each side must consider

The current debate provides valuable lessons beyond Europe. First, regulatory alignment needs to strike a balance between protecting sovereignty and preserving innovation. EU policymakers need to understand that strict restrictions alone will not create competitive local ecosystems. Regulatory frameworks should incentivize development, R&D investments, and collaboration between governments and European tech firms. For US providers, adaptability is key. Finding ways to create value within regulatory constraints helps companies compete fairly in Europe.

Second, the need for diversified cloud strategies extends beyond Europe; it is a global requirement. For businesses and governments on both sides of the Atlantic, reliance on a single provider is becoming increasingly unsustainable. Multicloud and hybrid cloud strategies will be critical for reducing risk, even though these strategies introduce additional complexity. US companies should lead by example, proving their willingness to integrate seamlessly with heterogeneous ecosystems rather than locking customers into walled gardens.

Third, both sides must work together to establish common security and operational standards. Rather than focusing solely on walls and barriers, the transatlantic debate could be an opportunity to set common standards for security, transparency, and data sovereignty. Building frameworks like these will help global organizations navigate regulatory fragmentation while minimizing inefficiencies.

The road to autonomy and pragmatism

The EU’s vision of cloud sovereignty makes a strong case for data protection and less reliance, but this goal is still years away from being achievable. Splintered priorities, the dominance of US hyperscalers, and the lack of viable European alternatives make progress uncertain. Yet this struggle is not unique to Europe. The challenge of avoiding reliance on a few central players and the accompanying geopolitical implications affects countries around the globe.

The best route is to temper protectionist regulations through pragmatic collaboration, mutual adaptation, and shared goals. As cloud computing becomes more critical to global infrastructure, both sides have much to gain from building a digital future that combines sovereignty with innovation, stability, and fair competition. Rather than steadfastly opposing Europe’s ambitions, the US and its cloud giants can become essential partners in making this vision a reality that benefits everyone.

David S. Linthicum is an internationally recognized industry expert and thought leader. Dave has authored 13 books on computing, the latest of which is An Insider’s Guide to Cloud Computing. Dave’s industry experience includes tenures as CTO and CEO of several successful software companies, and upper-level management positions in Fortune 100 companies. He keynotes leading technology conferences on cloud computing, SOA, enterprise application integration, and enterprise architecture. Dave writes the Cloud Insider blog for InfoWorld. His views are his own.

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