EU cloud law risks entrenching national markets, report warns
A report argues that the EU’s proposed Cloud and AI Development Act (CADA) could undermine its goal of stronger cloud sovereignty by encouraging member states to favour domestic suppliers. The authors warn that this may entrench national markets and make it harder for Europe-wide cloud providers to compete.
The European Centre for International Political Economy analysed 8,725 cloud-related public contracts across nine EU countries from 2018 to 2025, finding that nearly all went to providers based in the purchasing country. It says some domestic prime contractors rely on infrastructure from large hyperscalers, while CADA combines security and resilience aims with industrial policy. The report recommends defining sovereignty by outcomes such as data security and the ability to switch providers, alongside rules that support interoperability and competition.
- EU cloud rules may strengthen national markets.
- Nearly all analysed contracts went to domestic providers.
- Researchers urge a focus on security and provider choice.
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Originally published by The Register as “Europe’s cloud sovereignty rules could do more harm than good”.