The Dutch government on Monday imposed a complete prohibition on IBM spinoff Kyndryl’s proposed €100 million (about $113 million) acquisition of Solvinity — marking the first time the Netherlands’ Investment Screening Bureau (BTI) has ever banned an acquisition outright. Solvinity provides the cloud and storage infrastructure underpinning DigiD, the national digital identity system through which Dutch citizens access tax filings, healthcare records, pension information, subsidies, and virtually all other government services. State Secretary for Digital Economy Willemijn Aerdts published a letter to parliament on Tuesday formally adopting the BTI’s recommendation, citing “a possible risk to the public interest.” Kyndryl had announced the deal in November 2025; the competition authority ACM cleared it on antitrust grounds in February 2026, but the parallel investment screening process, triggered under the Act on Undesirable Control in Telecommunications (WOZT), reached the opposite conclusion. The core concern was that U.S. ownership would subject DigiD infrastructure to American legal and intelligence demands — including compelled data disclosure orders that override local data protection law. Kyndryl said it was “extremely disappointed” and accused the process of being “politicised.” An alternative offer from a Dutch buyer had also fallen short.
The decision lands as a wider European sovereignty push accelerates. Politico, which first reported the block, noted that the European Commission is expected to present its Tech Sovereignty Package on May 27 — one day after the Dutch announcement — with proposals that could restrict use of American cloud providers for sensitive public-sector workloads. AWS, Microsoft Azure, and Google Cloud collectively control more than half of Europe’s cloud market. In the Netherlands, the case had already drawn months of public protests, Tweede Kamer debates, and a court challenge backed by journalists and privacy advocates including Joris Luyendijk and the organisation Privacy First; the BTI received the acquisition notification on November 21 and launched its WOZT investigation immediately. Dutch officials said the government does not anticipate U.S. retaliation over the decision, and stressed that the investment screening framework is country-neutral and applies equally to all foreign investors. Whether Solvinity will now pursue a sale to a Dutch or European buyer remains open.