EU mulls barring US cloud providers from handling sensitive government data

The European Union is reportedly drafting rules that would restrict member states from using American hyperscalers — Google, Microsoft, and AWS — to process sensitive government data, according to sources cited by CNBC. The move reflects mounting concern over digital sovereignty as political trust between Brussels and Washington has eroded, and as fears grow that data held under U.S. jurisdiction remains exposed to American legal demands regardless of where it is stored.

The practical obstacle is dependency. Many EU governments have deeply embedded their workflows in U.S. cloud platforms and show little appetite for unwinding those contracts voluntarily. The Netherlands, for instance, recently approved the sale of a government ID services provider — along with the associated personal data — to an American buyer over the objections of its own parliament. A bloc-wide prohibition would override that inertia, forcing member states off U.S. infrastructure for regulated workloads.

The commentary expects significant dilution of any final rules under lobbying from large member states with entrenched cloud relationships. Even so, the discussion marks a notable shift from the long-standing assumption that hyperscaler dependence was tolerable, and signals a wider European push toward sovereign cloud alternatives.