The European Union is weighing rules that could bar member governments from using U.S. cloud providers for sensitive data. Sources tell CNBC that the proposal targets services from Google, Microsoft, and Amazon. The move reflects growing distrust after recent data‑sharing disputes.

Officials argue that reliance on foreign infrastructure exposes critical government systems to political risk. A Dutch case, where a national ID service was sold to an American firm against parliamentary opposition, illustrates the urgency. The EU would make it illegal to hand over classified information to U.S. firms.

If enacted, the regulation would force governments to shift workloads to European or other non‑U.S. clouds, reshaping procurement and compliance strategies. Operators of cloud platforms would face new contractual constraints and security audits. The policy signals a decisive clampdown on data sovereignty in the bloc.

Critics warn that the rule could stall digital transformation projects and increase costs for public agencies. Supporters argue that safeguarding sensitive data outweighs potential delays. The debate highlights the tension between cloud adoption and national security in the digital age for governments worldwide and industry partners.