US tech giants warn Europe that ditching US tech giants could cost €115B

Some of America's biggest tech companies have a warning for Europe: curb your reliance on US cloud providers, and it could cost you €115 billion. That's the finding of a new study commissioned by CCIA Europe, a lobbying group whose members include Amazon, Google, and Meta, companies that have plenty of reasons to want European governments to keep buying American cloud services. The research, conducted by the European Centre for International Political Economy (ECIPE), claims the European Commission's proposed Cloud and AI Development Act (CADA) could saddle Europe with €115 billion in costs over the next decade, more than six times the Commission's upper estimate of €18 billion. The report argues that restrictions favoring European cloud providers would leave governments and businesses facing hefty bills to migrate workloads and rewrite software. It puts direct public-sector costs at €33.3 billion, with a further €80 billion potentially falling on private companies in sectors including banking, healthcare, energy, and transport. However, a rather large asterisk is attached to that €80 billion figure. It assumes the Commission extends sovereignty requirements beyond public procurement to cover 25 percent of cloud workloads in essential private-sector industries. In other words, it's a modeled scenario, not a bill Brussels has already handed European businesses. The study also comes with some baggage of its own. CCIA represents several US technology giants that dominate the European cloud market, including Amazon and Google. Both have spent years selling European customers cloud services while more recently developing sovereign cloud offerings designed to address concerns about foreign ownership, data access, and regulatory control. Amazon, for example, has been developing its AWS European Sovereign Cloud, while Google markets a range of sovereign cloud solutions. Apparently, sovereignty is an attractive proposition when it comes with a hyperscaler logo attached. Meta, another CCIA member, has its own interests in European AI infrastructure, although it is not a commercial cloud provider on the scale of AWS or Google Cloud. The report specifically targets Article 31 of the proposed legislation, which it says could allow the Commission to extend sovereignty requirements into essential private-sector services. CCIA argues that forcing businesses to move away from existing cloud infrastructure could trigger expensive software redevelopment projects, with code rewriting and re-architecting accounting for 69 percent of its estimated costs. Luxembourg would apparently take the biggest hit, with the study putting the cost at €1,711 per worker over ten years. Denmark (€905), Austria (€900), and Finland (€864) also face hefty bills, as does Ireland (€856), which hosts the European headquarters of several US tech giants. CCIA is urging EU governments to overhaul the proposed legislation, limit sovereignty restrictions to sensitive workloads, and abandon requirements based on corporate origin or personnel nationality in favor of what it calls risk-based technical safeguards. "Member States cannot rely on the Commission's incomplete estimates when deciding CADA's strict sovereignty requirements for cloud and AI providers," said Mitchell Rutledge, CCIA Europe's policy manager. "Taxpayers and businesses will foot the bill, yet the official assessment missed 70 percent of CADA's true impact." For AWS and Google, offering European customers greater control over their data also helps retain business that might otherwise migrate to European competitors. It's a rather convenient arrangement: sell customers sovereignty on one hand, while an industry association representing your interests warns governments against imposing too much of it on the other. Neither company responded to The Register's questions. Whether Europe's sovereignty ambitions will prove as expensive as CCIA predicts is unclear. What's easier to establish is that the companies warning Brussels about the cost of reducing its dependence on US technology have plenty to gain if Europe decides to keep buying American. ® [Image text:] 007 000 010 00110000 01110011 10000000 10000011 00000100 00100011 10100100 10001000 00100000 01101010 01011011 10101000 01000111 00101001 00110011 10110111 00000100 00100011 00111011 1000001 01100000 0100000000101 0100111 0101111 07 100