US takeover of DigiD operator too high a risk, blocked by Dutch government

The Dutch government has blocked the US company Kyndryl from acquiring the Dutch cloud and infrastructure company Solvinity, which operates DigiD. It was determined that the risk involved with the takeover would be too great. 

The Netherlands blocks US takeover of Solvinity

The possibility of Kyndryl acquiring Solvinity has been met with a lot of resistance from experts and members of parliament in the Netherlands. Residents were also concerned about the US takeover, with a survey revealing that 87 percent of people in the Netherlands would stop using DigiD if the acquisition went through. 

Solvinity manages DigiD, which is used to tackle virtually every official matter in the Netherlands, from taxes and pensions to health insurance and social security benefits. This makes it nigh impossible to access many government services and websites without DigiD. 

The Investment Assessment Agency (BTI) investigated the possible acquisition and how it could impact DigiD accessibility and data security, and concluded that it “may pose a risk to the public interest”, according to an official letter to the parliament from the State Secretary of Digital Economy and Sovereignty Willemijn Aerdts. The government was also advised “to proceed with a complete prohibition of this acquisition”.

Major concerns about safety of DigiD amid US takeover

One of the main concerns about a US company acquiring Solvinity was that access to services such as DigiD and MijnOverheid.nl could be blocked if the US government imposed sanctions on the Netherlands. "If the boss of Kyndryl receives a letter from the US government and has to share data, he must obey. His alternative is prison," tech expert Bert Hubert explained to NU.nl.

While European legislation requires EU member states to have national alternatives to these types of systems by the end of 2026, this deadline is not likely to be met. Some members of parliament have raised the alarm about the dependence on American tech companies. The government plans on phasing out reliance on US cloud services only in the coming years.