EU Proposes Restricting Microsoft and Google Access to Public Cloud Contracts

The European Commission has prepared a legislative proposal targeting the reduction of the European Union's dependency on American technology corporations, particularly in strategic sectors such as energy, banking, and healthcare. This initiative primarily affects major US cloud service providers including Google, Amazon, and Microsoft.

According to the draft Cloud and AI Development Act set to be presented to the European Parliament on June 4, the Commission plans to bar these US companies from participating in government tenders for cloud services in key industries. The proposed legislation reflects growing concerns about data sovereignty and the geopolitical risks associated with reliance on foreign technology providers.

Strengthening EU Cloud Sovereignty

The core objective of the law is to bolster the EU's independence in cloud technology by imposing stringent requirements on service providers. One critical measure involves evaluating the extent of third-country control over provider data and services. The legislation also mandates the mandatory use of software and hardware developed within EU member states for procurement in strategic sectors.

"The EU’s proposal signals a strategic shift to secure critical infrastructure from foreign influence and promote technological autonomy in cloud services," a key analysis notes.

Currently, Amazon, Microsoft, and Google dominate over 60% of the global cloud services market. The new requirements could effectively limit their participation in EU public sector tenders, thereby reshaping the competitive landscape in favor of European providers.

Additionally, the proposal introduces accelerated approval processes for the construction of data centers within the EU, aiming to enhance local cloud infrastructure capacity and reduce dependency on external providers.

Geopolitical Drivers and Regulatory Context

The backdrop to this legislative push includes the US Cloud Act, which permits American authorities to access data held by US companies even if the data resides on servers abroad. This extraterritorial claim has fueled European apprehensions about data privacy and sovereignty.

The EU has been systematically pursuing digital sovereignty through recent laws such as the Digital Markets Act (DMA) and Digital Services Act (DSA), focusing on regulating online competition and platform accountability. The Commission has also launched multiple antitrust investigations targeting Amazon, Microsoft, Google, and other tech giants.

For instance, the European Commission is reportedly preparing to fine Google hundreds of millions of euros for search ranking practices that allegedly favor its own services, violating the DMA provisions.

This new cloud-focused legislation represents a continuation of the EU’s strategic approach to recalibrate its technological ecosystem, reduce reliance on foreign corporate dominance, and safeguard the integrity of its critical infrastructure.

Implementation and political acceptance of the proposed law remain uncertain, as it must secure backing from both EU member states and the European Parliament. Nonetheless, the initiative underscores a significant policy shift emphasizing data sovereignty, security, and economic autonomy in the EU’s evolving digital strategy.