The Netherlands imposed a complete prohibition on Kyndryl’s planned acquisition of Solvinity, a Dutch cloud provider. The deal, valued at about €100 million, would have transferred control of the platform hosting DigiD, the digital identity system used by millions of residents to access essential government services. The Dutch Investment Screening Bureau recommended a full ban after assessing the transaction under the foreign investment screening framework. The prohibition is the first time the bureau has blocked a US acquisition since it began operating. Solvinity also operates MijnOverheid and Digipoort, which support citizen communications and business-to-government digital services. The government cited risks related to the US CLOUD Act, which can compel US-headquartered companies to provide data stored worldwide.
"The Dutch government has imposed a " complete prohibition " on the acquisition of Solvinity, a Dutch cloud provider, by Kyndryl, the American IT infrastructure company spun out of IBM in 2021. The deal, valued at roughly €100 million, would have given a US-headquartered firm control over the platform that runs DigiD, the digital identity system used by millions of Dutch residents to access tax, healthcare, pension, and government services."
"Willemijn Aerdts, the Dutch minister for the digital economy, announced the decision on Monday in a letter to parliament. The government said the acquisition poses a possible "risk to the public interest" based on the recommendation of the Bureau for Investment Screening, which evaluated the deal under the Netherlands' foreign investment screening framework."
"It is the first time the bureau has blocked a US acquisition since it began operating. The decision was not close. The screening body recommended a full prohibition rather than imposing conditions."
"The concern is the US CLOUD Act. The 2018 law gives American law enforcement and intelligence agencies the authority to compel US-headquartered companies to hand over data stored on their servers anywhere in the world, regardless of the host country's data protection laws. If Kyndryl owned Solvinity, the Dutch government's digital id"
#foreign-investment-screening #digital-identity-digid #cloud-infrastructure #us-cloud-act #national-security-and-public-interest
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