The European Commission has unveiled proposals aimed at ensuring no foreign government or company possesses a 'kill switch' capable of disabling or disrupting critical technology services across the continent. This initiative forms part of a broader strategy to diminish reliance on the United States and China in key sectors such as cloud computing, artificial intelligence, and semiconductor production.
Addressing Vulnerabilities
Henna Virkkunen, the European Commission vice-president for tech sovereignty, emphasised the need to control sensitive services and data within Europe. The proposals come in response to vulnerabilities exposed last year when China halted semiconductor exports, nearly bringing the European automotive industry to a standstill. Additionally, there are concerns that a future US president, such as Donald Trump, could leverage a 'kill switch' to terminate US cloud services overnight or compel providers to hand over sensitive data.
Reducing 'Risky Dependencies'
Virkkunen clarified that the EU does not intend to isolate itself or produce everything domestically. Instead, the focus is on identifying and mitigating 'risky dependencies' by ensuring that sensitive services and data related to security and law enforcement remain under European control. She stressed the importance of eliminating any possibility of a 'kill switch', noting that it would be 'very difficult' for US companies to meet strict EU criteria for providing cloud services in areas like defence.
According to the Commission, the EU relies on foreign providers for over 80% of digital products, services, infrastructure, and intellectual property, creating what it describes as 'excessive technological dependencies'.
Impact on US Relations
The proposals, which require approval from member states and the European Parliament, could heighten tensions with the Trump administration. Washington has previously criticised EU digital regulations and routinely threatened allies with tariffs. Under the draft law, EU member states would be required to conduct risk assessments of cloud service providers in sensitive sectors such as defence, criminal justice, and border management. If a service is deemed risky, authorities may be compelled to switch providers.
US cloud providers operating in the EU might need to comply with EU data protection rules and demonstrate that they would not be forced to surrender EU data to US authorities. US companies could argue that their European entities already satisfy sovereignty requirements.
Industry Reactions
Lara Natale, senior director for public affairs at the Centre for Future Generations, a Brussels-based thinktank, predicted that US companies would invest heavily in lobbying efforts to shape the final regulations. The Computer and Communications Industry Association, whose members include Amazon and Google, criticised the proposals as 'a dangerous recipe for progressive market shutdown' that could exclude trusted providers from parts of the EU market.
Boosting European Tech Infrastructure
The Commission also aims to enhance Europe's AI infrastructure by fast-tracking datacentre construction and promoting domestic semiconductor production. However, Olivier Darmouni, an associate professor at HEC Paris, expressed scepticism about building an 'advanced manufacturing facility' for cutting-edge semiconductors and AI chips within the EU. He argued that achieving such a goal in the timeframe needed to catch up with the US and China is unrealistic. Nonetheless, producing other chips, such as RAM and memory chips, where there is a global shortage, could still be beneficial.
Despite the European Chips Act of 2023, the EU produces only 10% of the world's semiconductors and remains almost entirely dependent on the US and East Asia for advanced chips, including AI chips. Building fabrication plants for state-of-the-art AI chips is a multi-year, multi-billion-dollar endeavour.
Energy Efficiency and Climate Goals
As part of a plan to triple the EU's datacentre capacity within five to seven years, the Commission will introduce a rating system to ensure energy efficiency. It will also establish 'acceleration zones' to fast-track permitting for datacentres. Darmouni questioned how the EU will reconcile this expansion with its climate objectives, warning that datacentres could drive up electricity bills and harm climate trajectories.
