USA

US ‘disappointed’ after Netherlands blocks takeover of online ID platform

The United States said on Wednesday it was “disappointed” by the Dutch government’s decision to block New York-based Kyndryl’s planned acquisition of a cloud services provider over national security concerns.

“We are disappointed with the Dutch government’s decision regarding the Kyndryl-Solvinity agreement,” the Dutch Embassy in The Hague said. he said in a statement. “We understand and respect the responsibility to protect critical infrastructure and protect citizens’ data.”

“While we believe that additional time for dialogue should enable the identification of a path forward to address legitimate concerns, we are committed to working closely with Dutch partners to protect the interests of both countries going forward.”

Kyndryl, an independent subsidiary of IBM announced in November It said it had struck a deal to acquire Netherlands-based Solvinity to expand its footprint in Europe.

Solvinity welcomes the Netherlands-based company DigiD platformIt is a national digital identity system that citizens use when dealing with government agencies, healthcare providers, educational institutions and retirement funds.

The proposed $113 million deal has faced opposition from lawmakers and activists concerned about foreign ownership of the tool containing sensitive information. According to Reuters. There were also warnings that the acquisition could make the Dutch firm vulnerable to legal and intelligence pressure from the United States.

Adopted in 2018 Clarifying the Legal Use of Data Abroad The (CLOUD) Act gives US law enforcement the authority to force US-owned technology companies to turn over data under their control, regardless of where the data is stored.

Dutch state secretary for Digital Economy and Digital Sovereignty Willemijn Aerdts told the Dutch Parliament on Tuesday that he was acting on the advice of the national authority tasked with screening foreign investments and blocking the deal.

Aerdts wrote that it had been determined that the proposed acquisition “may pose a risk to the public interest” but did not explain why.

“The Netherlands highly values the presence of foreign, especially US-based technology companies and the added value they bring to the Dutch economy and digital infrastructure, but also maintains an independent investment screening framework that aims to protect public interests and applies equally to all investors regardless of their country of origin,” the letter said. The statement was included. Translation from Politico EU.

Kyndryl said it was like this:extremely disappointedThe government insisted it “consistently engaged in good faith” with stakeholders throughout the process.

“Despite this interaction and our long history of managing mission-critical operations in the Netherlands, the politicization of this process has overshadowed the clear and significant benefits this transaction will bring to Solvinity customers and Dutch citizens,” the company said.

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