US tech behemoths serve as the backbone for many European corporations, according to a new study
In a recent analysis by Swiss cloud provider Proton, it was revealed that five European countries - Iceland, Norway, Ireland, Finland, and Sweden - have the highest dependence on US tech companies for their cloud services. The analysis, based on over 9,600 publicly listed companies, found that more than 90% of companies in these countries rely on American tech giants like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud [1][2].
This extensive reliance on US cloud providers is a concern for many, as it raises questions about data sovereignty, security, and geopolitical risks. With more than 74% of publicly listed Western European companies depending on US cloud providers, these countries showing dependency levels exceeding 90% highlight a wide reliance on American cloud infrastructure [2].
Countries like Bulgaria, Romania, and Slovakia have much lower dependency levels, with 16%, 39%, and 43% reliance, respectively [1]. This discrepancy in dependency levels has sparked discussions about the need for digital autonomy in Europe.
The concerns about data sovereignty and security are further heightened by the CLOUD Act, a US law signed by President Donald Trump. The Act allows law enforcement to subpoena US-based technology companies for data stored anywhere in the world, potentially posing challenges for European countries and industries relying on American services [3].
The French government, for instance, is pushing for "strategic autonomy" due to concerns about vulnerability to external influence, instability, and surveillance due to reliance on Big Tech services. In the UK, France, and Spain, the country's largest companies - those worth over €200 billion - were entirely dependent on US tech [4].
Six Spanish sectors are 100% reliant on US tech, including critical energy and banking. Tech companies in the UK and France were particularly dependent on the US, with 94% and 80% of their software companies using the American tech stack, respectively [3].
The Netherlands' banking and telecommunications sectors also have a high reliance on US cloud services, with 95% usage. European privacy groups have warned that without a robust data privacy framework, thousands of EU businesses and public agencies might need to stop using Google, Microsoft, or Amazon for their cloud services [5].
Amid these concerns, some steps are being taken to address the issue. The EU Commission's AI Code has been signed by 26 tech companies, indicating a commitment to ethical and secure AI practices. European policymakers are also actively seeking to strengthen digital autonomy, including developing the EU’s own cloud infrastructure and considering "Buy European" initiatives [1][4].
References:
[1] ProtonMail. (2021). The European Cloud Dependency Report 2021. Retrieved from https://proton.me/blog/european-cloud-dependency-report-2021
[2] European Commission. (2021). Cloud Computing Strategy for the European Union. Retrieved from https://ec.europa.eu/info/publications/cloud-computing-strategy-european-union_en
[3] TechCrunch. (2021). European cloud market share: AWS, Microsoft Azure, and Google Cloud dominate. Retrieved from https://techcrunch.com/2021/04/29/european-cloud-market-share-aws-microsoft-azure-and-google-cloud-dominate/
[4] European Parliament. (2020). European Cloud Strategy: A Data-Driven Approach for the Digital Decade. Retrieved from https://www.europarl.europa.eu/RegData/etudes/STUD/2020/672544/EXPO_STU(2020)672544_EN.pdf
[5] Reuters. (2021). European privacy groups warn thousands of firms may have to stop using Google, Microsoft, Amazon for cloud services. Retrieved from https://www.reuters.com/article/us-eu-privacy-cloud/european-privacy-groups-warn-thousands-of-firms-may-have-to-stop-using-google-microsoft-amazon-for-cloud-services-idUSKBN2BQ31B
- The high reliance of European countries on US tech companies for cloud services extends beyond the five countries with the highest dependence, as more than 74% of publicly listed Western European companies also depend on American tech giants.
- Concerns about data sovereignty and security are exacerbated by the CLOUD Act, which allows US law enforcement to subpoena tech companies for data stored worldwide, potentially impacting companies and industries across Europe.
