Europeans are dangerously reliant on US tech. Now is a good time to build our own | Johnny Ryan
TFrench judge Nicolas Guillou knows exactly how much Europe depends on American technology. Guillou and his colleagues at the International Criminal Court are under US sanctions. They can no longer use e-commerce, book hotels online or rent a car. Their smart home devices ignore them. Credit cards from European banks no longer work, because Europe has not yet developed its own Europe-wide payment system, so most electronic purchases go through Visa and Mastercard. Converting euros into foreign currencies is extraordinarily difficult because everything goes through the dollar. Living in Europe is no protection against Donald Trump destroying your digital life.
This dependence is not limited to modern comfort. Last year, the chairman of the Danish parliament’s defense committee said he regretted his role in Denmark’s decision to buy American-made F-35 fighter jets: “I can easily imagine a situation in which the United States demands Greenland from Denmark and threatens to disable our weapons and let Russia attack us if we refuse. Buying American weapons is a security risk we cannot take.” He is not alone. Spain has abandoned its plan to buy F-35s.
Perhaps the danger should have been clear a decade ago when it was revealed that US spies were routinely recording the phone calls of millions of Europeans and tapping the phones of European leaders. But across Europe, governments, militaries, businesses, doctors, teachers and teenagers continued to trust American technology. Sensitive national policies are written in Microsoft software. Medical and tax records are live on Amazon’s servers. Important decisions are made on video systems managed by Microsoft, Cisco or Zoom. Young Europeans see the world through a lens distorted by Snapchat filters and YouTube algorithms. European news agencies rely on Google advertising auctions.
Despite all this, Europe has a path to digital sovereignty. Loosening America’s grip on word processing, videoconferencing and the “enterprise software” that businesses depend on is not technically difficult. As veteran tech investor Roger McNamee told me, most of this technology was perfected in the 1990s and 2000s and has since become “enhittified” due to monopoly effects. Investors are selling software stocks because they worry that these products can be too easily built by new, large-scale coded language models. The time has come for Europe to build better.
The Austrian military has already abandoned Microsoft and turned to open source services hosted in Europe, and some German regional governments have done the same. The Danish Data Protection Authority has asked Danish schools to abandon Google laptops in 2024. The new Dutch government says digital sovereignty will be a national priority. France has migrated its 5.7 million public sector employees to Visio, an alternative to Zoom developed by the government, running on French infrastructure. And the European Commission is building a system based on Matrix, an open source European technology that allows communication between different applications and servers, without ceding control of the conversations to a single company.
But Europe’s real technological challenges run deeper. First, each of the 27 EU countries has its own way of doing business and its own legal requirements. Even though the European market is huge (450 million consumers), startups never reach critical size because it is too difficult for them to operate across Europe. The IMF estimates that cross-border friction within the EU is equivalent to a 110% tariff. This, as detailed in a report by former Italian Prime Minister Enrico Letta, kills everything from consumer technology to cloud infrastructure at the cradle.
Despite identifying this problem decades ago, EU countries are unwilling to sacrifice their domestic practices and disappoint domestic lobbies who profit from the status quo. That could finally change following last week’s potentially momentous deal by EU leaders to make Europe “one market” and “buy European” in strategically important sectors such as defense, space, cleantech and AI.
A second challenge is that European startups cannot get the kind of investment and IPOs that the United States enjoys, because the European capital market is also a messy mess of national markets. That could also change soon, with a Union-wide financing scheme in the works to unlock 10 trillion euros stored in savings accounts for investment.
The final challenge is that European governments may not have the political determination to defend the continent. Faced with the threat of seizing Greenland, did they finally take a hard line with Trump at Davos in January? It is at least as likely that it was his own Treasury Secretary, Scott Bessent, fearing the damage to the dollar from a retaliatory trade war, who convinced the US president to back down.
But polls taken after the Greenland crisis show that most Western Europeans (including the British) do not want greater American influence. They want more Europe. They also want more powers and decision-making at European level.
Some leaders, such as Friedrich Merz and Giorgia Meloni, want to achieve economic transformation by reducing regulation and watering down European standards at all levels. But Rather than diluting its data laws, Europe should start enforcing them rigorously, to finally break the hold of Google, Microsoft and Amazon on the European market.
The American technology sector appears today as an asset, but it is also a potential liability, because of its domination of the American economy and because Trump’s voters do not share his love for this sector. Europe can address this vulnerability and, in doing so, break Trump’s support.
But for now, Europe continues to outsource the machinery and plumbing of its democracy, commerce and military to American technology companies. This has, in effect, given Trump a circuit breaker that Europeans should fear.
Before the US president makes his next demand, before his agents further undermine European democracy, European leaders should make it clear that they will not take the knee. They will rise. And build.
