For the last decade and a half, Europe focused on “taming Big Tech” — trying to address “anti-competitive practices” by US tech giants through antitrust and regulation. None of it has worked. No European business has been elevated or turned into a success story by promises of antitrust and regulation creating a “level playing field.”
We have neglected to build. Build our own digital infrastructure. Everything that lies below and supports the apps and services we use every day (from chips to compute to cloud to software to connectivity) is built on non-European infrastructure.
How did this happen? Europe was at the forefront of technology 20 years ago. We have incredible capabilities, and we are a rich continent. Fragmentation is a problem for scaling, but it has not stopped US companies from coming in and rolling out across the entire continent.
Of course, there is our perennial failure to create an Internal Market, a Capital Market Union, and to mobilize private capital, but how did that lead to us being so apathetic and increasingly resigned to our “digital colony” state? The US tech giants came in, set up their HQs, and rolled forward. Yes, they have capital. But capital is not missing in Europe – if anything, we are sending all of our savings to be invested in the US. We have an allocation problem. But all the tech we possibly need is here.
We are now a digital colony. Between 80 and 90% of cloud computing used by European customers is with the three US hyperscalers. Dependencies are high at every level of the “stack.” Our sensitive data is held in non-European hands. It makes us vulnerable to outages (remember Cloudflare last year? – one catastrophic problem with a minor piece of the stack paralyzed half of Europe and reverberated for days).
Critically, we do not own the “kill switch”. What if this infrastructure turns hostile? What if it is weaponized by political actors trying to extract concessions? (International Criminal Court? Greenland, anyone?). The US has made abundantly clear that we are absolutely on our own and need to defend ourselves.
Many in Europe understand we are at a historic moment and need to respond with action. Chancellor Friedrich Mertz’s election day promise of a 1 trillion euro investment in defense and infrastructure spending suggests “Germany may be back” — and if Germany is back, Europe may be back. France has also long understood the imperative to create a competitive space for European digital companies to exist and expand. It is time for Europe to claim at least part of the digital infrastructure.
That’s why I have formed “EuroStack,” a (volunteer, non-lobby) initiative animated by the need to steer a collective industry effort for a European “tech return.” Eurostack does not mean eradicating US tech companies from Europe, nor does it mean protectionism or, worse, autarchy. In fact, the EuroStack “ask” involves relatively modest measures (e.g., mandating that part of public procurement favors European suppliers — “Buy European,” incentivizing private demand, helping suppliers to sell European, direct private capital to European initiatives and dedicate some public funding to dealing selectively with market failures).
The first target is a “Buy European” mandate in public procurement: European taxpayers’ money should be used to create competitive spaces for European suppliers by requiring a portion of new contracts to be assigned to European suppliers. Hyperscalers’ size and commercial inducements (years of free services, discounts, rebates, freebies, and more) make it impossible for European companies to compete upfront for new contracts on a fair basis.
The EuroStack initiative is creating concern among hyperscalers who realize there is a resurgence of pride and concern in Europe (given the new geopolitical environment) about our ability to be more autonomous and self-reliant in a polarized world. They have pulled all the stops in trying to reassure European customers and governments that, in fact, they are dependable and would never let us down. Some claim they will even “sue the Trump Administration” if they were asked to do something in breach of their obligations to European customers.
How credible is this promise? These are not art heists that need to be kept safe in a Swiss vault. They are sensitive data that Europeans need to have on our soil and under our control.
Critics charge that “digital sovereignty will hurt European growth” and that “Europe does not have the products to compete with US suppliers.” We must resist.
Europe’s digital future is in our hands. This is the moment for our governments and institutions to support a digital industry, which has become marginalized but is still alive and kicking. The alternative is to remain a “digital colony,” “between the American hammer and the Chinese anvil,” and never to realize our potential again. This is too bleak for Europe to contemplate.
Dr. Cristina Caffarra, an Honorary Professor at University College London, is a leading competition economist with over 25 years’ experience leading economic analyses in multiple competition investigations on landmark mergers and antitrust matters, before the EC and the competition agencies of the UK, multiple Member States, and across the globe.
Bandwidth is CEPA’s online journal dedicated to advancing transatlantic cooperation on tech policy. All opinions expressed on Bandwidth are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.
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