US Tech Giants Warn Europe That Data Sovereignty Requirements Could Cost $128 Billion

A study commissioned by CCIA Europe, whose members include Amazon, Google, and Meta, estimates that the EU's proposed Cloud and AI Development Act could impose 115 billion euros ($128 billion) in costs over a decade as governments and companies migrate workloads and rewrite software. The figure is more than six times the European Commission's upper estimate. However, roughly 80 billion euros ($89 billion) of it comes from a modeled scenario assuming sovereignty rules are extended to 25% of cloud workloads in essential private-sector industries.The Register reports: 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 euros per worker over ten years. Denmark (905 euros), Austria (900 euros), and Finland (864 euros) also face hefty bills, as does Ireland (856 euros), 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.

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