Dutch gov’t blocks US company’s acquisition to maintain digital ID sovereignty

The Netherlands has blocked the proposed acquisition of Solvinity, which plays a key role in the country’s national digital identity system, by U.S.-based Kyndryl.

Solvinity holds a contract to provide the cloud infrastructure the Netherlands’ DigID runs on, which opposition political parties argued should be terminated if the acquisition was approved.

Instead, the Bureau of Investment Review (BTI) recommended in its capacity as the enforcement body for the Insufficient Telecommunications Control Act (WOZT) that the deal be banned.

Secretary of State for Digital Economy and Sovereignty Willemijn Aerdts says in a letter to Dutch lawmakers that a “country-neutral, risk-based and proportionate” analysis has determined the deal “may pose a risk to public interest.”

The letter alludes to the value foreign companies, especially American ones, contribute to the Dutch economy.

Kyndryl said in a statement that it is “extremely disappointed” and claimed that “politicization of this process has overshadowed the clear and important benefits this transaction would have brought to Solvinity’s customers and Dutch citizens.”

The Dutch Cabinet will remain engaged with Solvinity about the company’s future. When the deal was originally announced, press in the Netherlands reported that a Dutch firm was narrowly outbid for Solvinity.

Aerdts also provided a confidential technical briefing to Parliament on the decision.

The European Commission is about to publish a set of tech sovereignty measures intended to increase the EU’s capacity to produce microchips and operate cloud platforms.

Article Topics

acquisitions  |  DigiD  |  digital ID  |  digital sovereignty  |  Kyndryl  |  Netherlands  |  Solvinity  |  United States