Dutch court upholds block on US firm's cloud company purchase

A Dutch court upheld a government decision to block the acquisition of cloud services company Solvinity by US IT infrastructure firm Kyndryl over concerns that sensitive data could be accessed by the US government.

The Dutch government announced at the end of May that it would block Kyndryl's planned purchase of Solvinity for 100 million euros, or $114 million.

Solvinity provides secure cloud services. Dutch lawmakers had raised concerns because the company supplies infrastructure needed for a digital platform used for public services, including filing taxes and state health insurance claims.

Solvinity asked the Rotterdam court to lift the ban, arguing that the government did not have legal authority to block the deal. The court rejected that argument, saying the law gave the government that authority and that the purchase of Solvinity by Kyndryl was a threat to the public interest.

The source reported that US laws allow the US government to require US companies to hand over data even if the data is held outside the country. It also said the US government has shown willingness to block access to technology and financial services.

The Rotterdam court said the junior minister responsible for the digital economy and sovereignty should review whether less restrictive measures could be used. The minister said that review would be completed by the end of September.

Kyndryl, which developed from IBM's IT services unit, did not immediately respond to AFP.