European Cloud Project Draws Backlash From U.S. Tech Giants
By Catherine Stupp
Germany and France are introducing a government-backed project
to develop European cloud infrastructure in an effort to help local
providers compete with U.S. technology giants, which dominate the
global cloud market.
Amazon.com Inc. and Microsoft Corp. criticized the initiative
announced this week, called Gaia-X, saying the project will
restrict data services along national borders.
The reach of Amazon, Microsoft and other U.S. giants worries
European politicians and corporate executives. Companies in Germany
and France, the continent's economic powerhouses, and in other
European Union countries are concerned about depending on
technology providers that must comply with the U.S. Cloud Act, WSJ
Pro Cybersecurity reported in October. The 2018 law requires
American firms to provide law enforcement with customers' personal
data on request, even when the servers containing the information
"There's no answer to the question of how secure our data really
is," Frank Melzer, chief technology officer of Festo AG, a German
company that makes robots and other industrial products, said this
week at a German digital conference where Gaia-X was announced.
Cloud providers taking part in Gaia-X will be required to
certify to their corporate customers that their information remains
secure and provide guarantees about where it is stored and how it
is processed. Participating in the project would require cloud
providers to use the same standards, letting businesses easily move
their data from one provider to another.
French and German government officials are set to meet this
month with companies interested in participating and the plan is to
create a governance structure for the initiative before the end of
the year, the German Economy Ministry said. A spokeswoman declined
Some European companies that use large American cloud providers
say those services are more competitively priced than cloud
services in Europe, WSJ Pro previously reported. Gaia-X could lower
transaction costs by standardizing contracts and processes between
cloud providers and customers, the German Economy Ministry said. It
didn't provide details about how much governments plan to invest in
Gaia-X is an "important initiative" but details about
performance, services and cost will determine whether European
cloud providers can compete with non-European suppliers, a
spokeswoman for German bank Commerzbank SA told WSJ Pro
Cybersecurity in an email. Commerzbank uses cloud services from
Alphabet Inc.'s Google and International Business Machines Corp.,
Another goal of the infrastructure plan is to help European
companies in industries such as manufacturing and health care in
their efforts to develop algorithms and artificial intelligence
without relying on foreign technology providers, government
"We need something like an Airbus for artificial intelligence,"
German Economy Minister Peter Altmaier said at this week's
Roberto Viola, a European Commission official focused on
communication and technology, also compared Gaia-X to Airbus SE,
the European multinational plane maker that is the main competitor
to U.S.-based Boeing Co.
"Europe remains open to the world, but with an ambition...to
have digital sovereignty," he said, speaking at the same
Microsoft and Amazon said they are able to host corporate data
securely and criticized the German and French governments'
A Microsoft spokesperson said digital sovereignty is a
legitimate goal, adding, "in the cloud age, however, we think it is
wrong to define sovereignty solely along territorial borders."
Instead, sovereignty needs "the most powerful cloud solution."
Microsoft is interested in participating in Gaia-X, the
The German Economy Ministry said non-EU companies will be able
to take part in the initiative if they "share our goals of data
sovereignty and data availability." A ministry spokeswoman declined
to comment on whether U.S.-based companies can meet those goals if
they comply with the U.S. Cloud Act.
A spokesperson for Amazon's cloud provider Amazon Web Services
said that Germany and France's plan "removes many of the
fundamental benefits of cloud computing for customers -- it
restricts freedom of choice, flexibility, and ability to scale
globally, without increasing security."
Write to Catherine Stupp at Catherine.Stupp@wsj.com
(END) Dow Jones Newswires
November 01, 2019 05:44 ET (09:44 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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