Dutch Watchdogs Urge Europe’s Banks to Pool Buying Power Against US Tech Giants
A report to the Dutch government states finance firms should negotiate cloud and AI contracts as a bloc, warning that dependence on American providers keeps deepening.
Key Takeaways:
- Pooling Buying Power: Dutch watchdogs suggest banks and finance firms combine their purchasing power to negotiate better terms with US tech giants like Amazon and Microsoft.
- Increasing Dependence: The report highlights that Europe’s reliance on American technology is growing, despite years of policy rhetoric about strategic autonomy.
- Cloud and AI Concerns: These services are seen as critical areas where Europe has handed control to foreign firms, mirroring the concerns behind Brussels’ tech sovereignty package.
Key Statistics:
- Market Dominance: Amazon Web Services (AWS), Microsoft Azure, and Google Cloud hold over 70% of the European cloud market, while local providers have around 15%.
- Cloud Dependency as a Risk: The report emphasizes that Europe’s cloud dependency is both a commercial and legal risk, exacerbated by the US Cloud Act.
Proposed Solution:
- Block Negotiations: By negotiating as a group, banks can gain stronger data guarantees, better pricing, and genuine exit options instead of accepting whatever terms hyperscalers present.
Dutch Actions:
- De Nederlandsche Bank (Dutch central bank) has moved essential cloud services off AWS and chosen Schwarz Digits, an IT arm of the German discount chain Lidl, as its European alternative. The report recommends a similar path.
Broader Context:
- European Scramble: This intervention fits into a larger European effort to reduce reliance on non-EU tech providers.
- Recent Developments: The Netherlands blocked a US firm from acquiring the cloud host behind its national digital identity system, marking its first such veto. Brussels is also developing rules to encourage public bodies to measure and reduce their reliance on foreign suppliers.