European governments discover their citizens' data remains subject to US law despite sovereignty promises
Microsoft's admission exposes the legal reality behind digital sovereignty claims as European dependence on American cloud infrastructure creates systematic vulnerabilities
In a French Senate hearing room this June, years of corporate marketing collapsed with a simple question. Could Microsoft guarantee that French citizens' data would never reach American authorities without French government consent?
"No, I can't guarantee it," replied Anton Carniaux, Microsoft France's legal director.
With those five words, one of the world's largest technology companies acknowledged what European digital sovereignty advocates had long suspected, geography means nothing when American law travels through corporate structures. Your data may sit in a French server, managed by French employees, under French contracts - but if an American company controls the infrastructure, American authorities can demand access.
This wasn't corporate incompetence or legal oversight. It was the system working exactly as designed. For decades, American technology companies have built the world's digital infrastructure while American lawmakers have crafted laws ensuring that infrastructure serves American interests. European governments are now discovering they've been digital tenants in someone else's house all along.
How America weaponised the cloud
The mechanism behind this reach is deceptively simple. In 2018, Congress passed the Clarifying Lawful Overseas Use of Data Act - the CLOUD Act - which requires American technology companies to surrender any data "in their possession, custody, or control" regardless of where it's physically stored.
The law emerged from a cat-and-mouse game between Microsoft and federal investigators. When the FBI demanded emails from Microsoft's Irish servers in a 2013 drug case, Microsoft refused, arguing American warrants couldn't reach foreign soil. The company won in appeals court, so Congress simply changed the law.
Now American legal authority flows through every server, every database, every application controlled by American companies, anywhere in the world. A French hospital using Microsoft Azure, a German manufacturer on Amazon Web Services, a British council using Google Workspace - all operate under systems where American prosecutors can demand access to European citizens' most sensitive information.
The traditional concept of territorial sovereignty - that French law governs French territory - crumbles when the infrastructure itself carries foreign jurisdiction. It's as if every American-built bridge came with the permanent right for American officials to stop and search anyone crossing it, regardless of which country the bridge happened to be in.
The three kings of cloud
The numbers tell the story of technological colonisation. Three American companies - Amazon Web Services, Microsoft Azure, and Google Cloud - control two-thirds of the world's cloud computing market. AWS alone commands one-third of global capacity. Europe's largest cloud provider, OVHcloud, represents less than one percent.
This isn't just market concentration - it's infrastructure dependency on a scale that previous generations of policymakers never imagined. European hospitals run on American servers. European banks process transactions through American systems. European governments store citizen data in American-controlled facilities.
"They finally told the truth!" says Solange Viegas Dos Reis, OVHcloud's Chief Legal Officer, about Microsoft's admission. "This reply from Microsoft brought kind of a shock for customers, because they suddenly discover what they have been taught for a while, 'Oh guys, don't worry, it will not apply to you.' It's false!"
The scale advantage is so overwhelming that European alternatives face an almost impossible catch-up challenge. Building hyperscale cloud infrastructure requires not just billions in investment, but decades of accumulated expertise in managing global networks, developing enterprise software, and operating at planetary scale. It's like trying to build a rival to the internet itself.
Europe's sovereignty mirage
In 2019, European leaders launched Gaia-X with grand ambitions, a federated cloud infrastructure that would challenge American dominance and restore European control over European data. French and German ministers stood together announcing a "European answer" to AWS and Google Cloud.
Five years later, the initiative has become a case study in how market reality defeats political aspiration. Gaia-X struggled with a fatal contradiction, you cannot build independence by including the very companies you're trying to become independent from. Yet European alternatives lacked the scale to compete, forcing the project to welcome American giants as participants.
German businessman Friedhelm Loh, whose company participated in early discussions, watched the initiative get "diluted" and potentially "sabotaged from within by the hyperscalers themselves." The fox wasn't just in the henhouse - the foxes were invited in as partners because the chickens couldn't build their own security system.
The deeper problem is that sovereignty requires more than good intentions and regulatory frameworks. It requires technical alternatives that can match incumbent capabilities. Building those alternatives while remaining dependent on existing infrastructure creates an impossible bootstrapping problem - like trying to construct a ladder while standing on it.
Sovereignty theatre
Sensing European anxiety, American cloud giants have responded with sophisticated marketing campaigns. Amazon promises an "AWS European Sovereign Cloud." Microsoft completed its "EU Data Boundary." Google partnered with Deutsche Telekom to offer sovereign services in Germany.
These offerings sound impressive, European-only staff, local data centres, promises that information never crosses borders. It's an elaborate performance designed to make European customers feel safe while changing nothing fundamental about the underlying power structure.
The legal reality remains unchanged. American parent companies cannot escape American law through subsidiary structures or operational arrangements. When Amazon's lawyers argued in German courts that their European subsidiary couldn't shield data from American jurisdiction, they revealed the core deception, you cannot purchase sovereignty from the very power you're trying to become independent from.
Physical location provides no protection when legal compulsion flows through corporate control. The CLOUD Act's extraterritorial reach means that "European" data centres operated by American subsidiaries offer the illusion of sovereignty while preserving American access. It's digital colonialism with better marketing.
The new colonialism
This isn't just about technology - it's about power. When European hospitals, banks, and government agencies depend on American digital infrastructure, they operate under a system where American interests ultimately prevail. Every major business decision, every sensitive government communication, every citizen's personal data potentially flows through systems subject to American legal oversight.
The parallels to previous eras of imperial control are striking. Colonial powers once controlled trade routes and resource extraction. Today's technological empires control information flows and digital infrastructure. The mechanisms differ, but the strategic outcome remains the same, the dominant power shapes how subordinate societies organise their most critical systems.
China understands this dynamic perfectly, which explains its parallel approach. China's National Intelligence Law requires Chinese companies to cooperate with state intelligence agencies, creating similar concerns for anyone using Chinese technology services. The competition between American and Chinese technological empires leaves European governments scrambling to avoid becoming digital vassals to either superpower.
European policymakers face an uncomfortable truth, accepting dependency comes with known risks, while building genuine alternatives requires enormous investment with uncertain prospects. The comfortable fiction of sovereignty through contracts and regulations is crumbling as legal realities assert themselves.
Awakening from digital dreams
Growing awareness is driving gradual European policy changes. France restricts American cloud providers from certain government contracts. German agencies face scrutiny over Microsoft dependencies. The EU's Data Governance Act and Digital Markets Act represent attempts to assert regulatory control.
But regulation cannot overcome market reality. European alternatives like OVHcloud, Scaleway, and T-Systems offer genuine sovereignty but operate at vastly smaller scale. They can serve specific needs but cannot replace comprehensive enterprise ecosystems built by American giants over decades.
Some organisations pursue hybrid strategies, American providers for routine work, European alternatives for sensitive data. This acknowledges both sovereignty concerns and practical constraints, though it requires careful data management that many find challenging to implement.
The reckoning
Microsoft's admission marked a watershed moment - not because it revealed new information, but because it shattered comfortable illusions. For years, European leaders could believe that contracts and data centres provided meaningful protection. That fiction is no longer sustainable.
The choice Europeans face is starker than most realise. Continued reliance on American digital infrastructure means accepting systematic vulnerability to foreign legal pressure, regardless of marketing promises or technical safeguards. Every European citizen's most sensitive information - medical records, financial data, private communications - potentially subject to American surveillance.
Building genuine alternatives will take decades and require sustained political commitment that Europe has struggled to maintain. The question is whether European societies can develop sufficient independence before these dependencies become permanently embedded in critical systems.
The uncomfortable truth Microsoft's lawyer acknowledged is that sovereignty cannot be purchased from your would-be sovereign. It must be built, brick by brick, server by server, with the patience and determination that previous generations brought to building physical infrastructure. The digital colonists are already here. The only question is whether Europeans will remain digital subjects or finally build their own house.