Europe’s cloud sovereignty rules could be counterproductive

Europe's push for cloud sovereignty is raising concerns about its effects on the cloud services market. A study by the European Centre for International Political Economy (ECIPE) indicates that member states are favoring domestic providers instead of creating a unified European cloud services market. This analysis is based on public cloud contracts in nine EU countries, where every contract linked to 'sovereignty' was awarded to local providers.

## Why it matters This trend could hinder the establishment of a single cloud services market within the EU, limiting opportunities for companies from other European nations and reducing competition. The concentration of the market on local providers could lead to higher prices and less innovation.

## What we know The study reviewed a total of 8,725 cloud-related procurement contracts from 2018 to 2025 and found that nearly all contracts were awarded to providers from the same country, indicating a lack of cross-border competition among EU member states. This suggests that the sovereignty policy in the cloud may be reinforcing a nationalist approach rather than unifying the European market.

## What remains unclear It remains unconfirmed how the European Commission will respond to this report and whether adjustments to current policies will be made. Additionally, it is unclear if concerns over the lack of competition will influence future legislative decisions related to cloud services in the EU.