US Tech Firms Say EU Data Rules Could Cost $128 Billion

A CCIA Europe-commissioned study estimates the EU’s proposed Cloud and AI Development Act could generate 115 billion euros ($128 billion) in costs over 10 years. It says software redevelopment would make up most of the bill, while about 80 billion euros of the total depends on an assumed expansion of sovereignty rules.

Slashdot has reported:

The EU’s proposed Cloud and AI Development Act could cost governments and businesses 115 billion euros ($128 billion) over a decade, according to a study commissioned by CCIA Europe, an industry association whose members include Amazon, Google and Meta. The estimate is more than six times the European Commission’s upper figure. About 80 billion euros ($89 billion) of the projected cost comes from a scenario in which sovereignty requirements cover 25 per cent of cloud workloads in essential private-sector industries.

The report focuses on Article 31 of the proposed legislation. It says the provision could let the European Commission extend sovereignty rules to essential private-sector services. The study estimates that moving businesses away from existing cloud infrastructure could prompt costly software redevelopment, with rewriting code and redesigning systems accounting for 69 per cent of the projected costs.

The study estimates Luxembourg would face the highest cost per worker over 10 years, at 1,711 euros. Denmark’s figure is 905 euros, followed by Austria at 900 euros, Finland at 864 euros and Ireland at 856 euros. Ireland hosts the European headquarters of several US technology companies.

CCIA Europe is calling on EU governments to revise the proposed law, restrict sovereignty requirements to sensitive workloads and drop rules based on a company’s origin or the nationality of its personnel. It says those requirements should be replaced with technical safeguards based on risk.

“Member States cannot rely on the Commission's incomplete estimates when deciding CADA's strict sovereignty requirements for cloud and AI providers,” said Mitchell Rutledge, CCIA Europe's policy manager. “Taxpayers and businesses will foot the bill, yet the official assessment missed 70 percent of CADA's true impact.”

AWS and Google offer European customers more control over their data, which can help retain business that might otherwise move to European competitors. The study’s warnings come from an association representing major US technology firms that also sell data sovereignty services to customers.