EU Unveils Tech Sovereignty Plan to Counter U.S. Dominance

BRUSSELS — The EU is moving to counter American dominance in technology by reaching for one of the oldest tools in its arsenal: industrial strategy.

As the European Commission unveiled a plan Wednesday to reduce Europe’s reliance on the foreign technology providers that underpin the modern economy, it was careful to stress that it was not picking a fight with U.S. digital giants.

Instead, the tech sovereignty package — motivated in no small part by U.S. President Donald Trump’s weaponization of Europe’s dependence on American firms — takes a longer-term view: boost the continent’s players so they can eventually challenge their U.S. rivals.

“We cannot afford to depend on others for the technologies that keep our hospitals running, our energy grids stable and our services secure,” Commission President Ursula von der Leyen said in a statement. “This is about protecting our citizens, defending our interests and making our own choices.”

The package’s centerpiece, the EU's Cloud and AI Development Act, includes a provision allowing the Commission to vet countries on whether they are trustworthy enough to serve Europe’s sensitive public sectors.

But the real focus of the proposed legislation is on measures aimed at helping European companies grow into serious contenders capable of taking on U.S. Big Tech.

If adopted, the package will direct public money toward products that contribute to Europe’s economy and independence from foreign firms; cut red tape for data centers; beef up research and innovation through “leadership initiatives”; incentivize countries to share digital capacities in a new “Eurocloud” forum; and require EU governments to come up with national strategies to boost the adoption of cutting-edge tech, including AI.

The package will also seek to ramp up the bloc’s demand for advanced chips — a response to criticism by the industry — with a series of industrial initiatives to revise a 2023 chips law.

The Commission’s proposals, which will now go to national governments and the European Parliament for negotiations on the final version, are a reply to rising concerns that relying on American technology is a vulnerability.

Brussels itself says EU countries spend €264 billion a year on American tech, with three U.S. giants — Microsoft, Google and Amazon — dominating the cloud services market that underlies everything from email communication, the storage and processing of public and private data and many of the tools powering government services.

Some EU governments have warned that it is neither realistic nor desirable to decouple the continent from U.S. tech.

With the European Parliament in the process of finalizing a controversial trade deal with the U.S., the Commission has taken pains to insist the new measures are not aimed at American firms.

The U.S. could still retain a high level of access to the European market, given an existing data privacy pact between the EU and the U.S. and recent efforts by big U.S. companies to put safeguards in place against foreign interference.

But whether the American tech sector can continue to serve some of the most sensitive sectors of the European economy is a politically charged question that will depend on the final form of the legislation — and crucially, how it gets implemented.

As part of its proposal to keep a list of trustworthy countries, the Commission would require EU governments to run a so-called “sovereignty risk assessment” for every digital service they rely on, measuring foreign control, potential access to sensitive data and the risk of operational disruption.

Within a year, they would have to determine the appropriate level of protection for each public sector and procure digital services accordingly — unless they can prove doing so would come at a “disproportionate cost,” the proposal reads. However, the Commission reserves the right to overrule their assessment in future legislation if it believes they downplayed the risks.

The Commission estimated that just one percent of Europe’s public services are so sensitive that they would be required under the proposed certification scheme to rely on the strict level that totally excludes foreign technology.