Netherlands blocks US takeover of vital digital supplier

BRUSSELS — The Dutch government is blocking a United States-based company's attempts to acquire a key online identification IT supplier.

Dutch firm Solvinity runs a platform for the country's DigiD app, which allows the country's citizens to authenticate themselves online when they want to book a doctor's appointment, buy a house or interact with public authorities.

In November, U.S.-based Kyndryl announced it would acquire Solvinity, triggering concerns that a key Dutch online identification tool would fall under foreign control. Across Europe, there have been increased concerns about the bloc's reliance on U.S. technology.

In a letter to the national parliament published on Tuesday, State Secretary for Digital Economy Willemijn Aerdts said the national authority charged with screening investments had advised the government to block the acquisition. The purchase was seen as posing "a possible risk to the public interest."

The government on Monday decided to adopt the advice and block the acquisition, Aerdts said.

"The Netherlands attaches great value to the presence of foreign, especially U.S.-based tech companies, and their added value to the Dutch economy and digital infrastructure, but it maintains, at the same time, an independent investment screening framework aimed at protecting the public interest and which applies equally to all investors, independent of their country of origin," the letter read.

The decision comes a week before the European Commission is set to unveil its tech sovereignty package, a set of proposals to reduce Europe's reliance on foreign technology in the areas of cloud, microchips and AI.

Kyndryl said in a statement it was "extremely disappointed" about the decision. "The politicization of this process has overshadowed the clear and important benefits this transaction would have brought to Solvinity's customers and Dutch citizens."

This article was updated to include a comment from Kyndryl.