Dutch government blocks US company from acquisition, citing ‘risk to public interest’

The Dutch government has blocked American IT giant Kyndryl from acquiring Solvinity, a Dutch cloud provider that hosts the Netherlands’ online identity platform. The government in The Hague said the deal poses a possible “risk to the public interest.”

Dutch minister for the digital economy Willemijn Aerdts said in a machine-translated letter published Monday that the government has imposed a “complete prohibition” on the acquisition. The deal would have allowed Kyndryl to buy Solvinity for an undisclosed sum. Solvinity hosts a platform called DigiD, a service managed by the Dutch government that allows the country’s residents to verify their identity when accessing public services.

The deal triggered fears that the deal would mean that DigiD data falls under foreign control, and could be demanded by U.S. authorities.

While the Dutch government did not provide an explicit reason for blocking the acquisition, the move comes as several European countries are moving to reduce their reliance on U.S. technology giants at a time where the Trump administration has been increasingly unpredictable and retaliatory.

U.S. law allows government authorities, including law enforcement and intelligence agencies, to demand that U.S. companies turn over data held in overseas datacenters, regardless of that country’s data protection laws.

Politico first reported the news. Kyrdryl told the publication that the company was “extremely disappointed” by the decision.