Big Tech warns of high costs for EU digital sovereignty

A lobby group representing major American technology companies has expressed concerns about European efforts to strengthen digital independence. It claims that measures aimed at reducing reliance on foreign technology providers could lead to significant financial costs, potentially reaching 115 billion euros over the next decade.

European push for digital self-reliance

In June 2026, the European Commission announced a plan to invest in cloud computing and artificial intelligence to foster local technological leaders and reduce dependence on foreign providers. This initiative is part of a broader effort to enhance Europe's digital sovereignty, reducing reliance on both American and Chinese technologies.

New legislation and its requirements

The European Commission’s proposed legislation, known as the Cloud and AI Development Act (CADA), introduces four levels of requirements for cloud services. Public institutions would be required to select a level for each service they purchase, based on the risk involved. Higher levels impose stricter controls on supplier ownership and control over software.

Cost estimates and concerns

A report by ECIPE, a Brussels-based think tank, estimates that the financial impact of these rules could be as high as 115 billion euros over ten years. This is significantly higher than the European Commission's own estimate of about 18 billion euros. The report was funded by the Computer & Communications Industry Association (CCIA), which represents major U.S. tech firms.

Main costs and challenges

According to the ECIPE report, the largest portion of the financial burden would come from code rewriting and software restructuring, accounting for 69% of the overall cost. Recurring cloud-related costs would add about 30%, and deferred digital projects would account for the remaining 2%. These costs highlight the complexity of migrating from existing systems to new ones.

Three scenarios and their implications

The ECIPE report models three scenarios for the period 2027–2036, with costs ranging from 35.6 billion euros to 233 billion euros. However, these are not presented as forecasts. The report criticizes the legislation for potentially extending sovereignty requirements to essential private services, a concern raised by the CCIA and other stakeholders.

Costs per person and regional differences

The report estimates that the average European citizen would face costs of about 548 euros over ten years, with Luxembourg having the highest per-person cost at 1,711 euros. Larger countries like Germany, France, and Italy, which already have national cloud computing rules, would experience lower costs compared to smaller countries with fewer local options.

American tech companies' dual approach

While American hyperscalers like Amazon and Google advocate for less strict regulations, they are also developing their own sovereign cloud offerings to address European concerns about data control and regulatory compliance. This approach allows them to maintain market share while responding to European demands for digital independence.

Balancing innovation and regulation

The European Commission emphasizes the risks of relying too heavily on non-European cloud providers, while the CCIA and other U.S. industry groups push for less restrictive rules and technical guarantees. Finding a balance between innovation and regulation remains a key challenge for the EU. Despite calls for independence, many European governments believe a complete break from American technology is neither realistic nor desirable.