EU Proposes Restricting Microsoft, Google Access to Public Cloud Contracts in Strategic Sectors

The European Commission has drafted a new legislative proposal aimed at limiting the access of major US technology companies—including Google, Amazon, and Microsoft—to public sector cloud service contracts within the European Union's strategic industries.

New Cloud and AI Development Act Targets US Providers

The proposed Cloud and AI Development Act, expected to be presented to the European Parliament on June 4, seeks to bolster the EU's autonomy in cloud technology by imposing stricter requirements on cloud service suppliers. Key criteria include assessing the degree of foreign government control over data and services provided by these companies.

Specifically, the legislation would restrict US cloud providers from bidding on public tenders related to energy, banking, healthcare, and other sectors deemed critical for national security and economic independence. Additionally, the draft mandates that both hardware and software used in these contracts must be developed within EU member states.

These measures stand to significantly challenge the participation of American cloud giants, who currently control over 60% of the global cloud services market.

"The EU’s move to require the use of domestically developed software and hardware represents a strategic bid to fortify regional technology sovereignty," experts say.

Furthermore, the bill proposes expedited approval processes for the construction of data centers within the EU to support the development of local cloud infrastructure.

Washington’s Cloud Act Spurs European Countermeasures

The initiative is motivated in part by European concerns over the US Cloud Act, which enables American authorities to compel US companies to provide access to user data regardless of server location. This extraterritorial reach has heightened anxieties about data privacy and sovereignty among EU policymakers.

Over recent years, the EU has actively pursued a regulatory agenda to reduce reliance on US technology firms. Landmark laws such as the Digital Markets Act (DMA) and Digital Services Act (DSA) have already imposed stricter competition and content responsibility rules on online platforms.

Simultaneously, the European Commission has launched multiple antitrust investigations targeting Amazon, Microsoft, Google, and other US tech giants, signaling a broader crackdown on perceived dominance abuses.

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

While the exact reception of the new cloud legislation by EU member states and Parliament remains uncertain, its passage would mark a significant shift in transatlantic tech policy, with potential reverberations for US cloud service providers and their market strategies in Europe.