Netherlands Blocks US Takeover of Vital Digital Supplier

The Dutch government has blocked an attempt by a United States-based company to acquire the Dutch IT supplier that runs a platform behind the country's national online identity system. The decision was set out in a letter to the national parliament.

What was decided

Dutch firm Solvinity operates a platform for DigiD, the app citizens use to authenticate themselves online when booking a doctor's appointment, buying a house or dealing with public authorities. In November, U.S.-based Kyndryl announced it would acquire Solvinity, raising concerns that a key Dutch online identification tool could fall under foreign control.

In the letter, State Secretary for Digital Economy Willemijn Aerdts said the national authority responsible for screening investments had advised the government to block the acquisition, which was seen as posing "a possible risk to the public interest." The government adopted that advice on Monday, Aerdts said.

Screening rules and the European backdrop

The letter stressed that the Netherlands values the presence of foreign, especially U.S.-based, technology companies and their contribution to the Dutch economy and digital infrastructure, but that it maintains an independent investment screening framework to protect the public interest — one that applies to all investors regardless of their country of origin.

The decision comes a week before the European Commission is due to unveil its tech sovereignty package, a set of proposals to reduce Europe's reliance on foreign technology in cloud computing, microchips and artificial intelligence. Concerns about that dependence have been growing across the bloc.

Kyndryl's response

Kyndryl said in a statement that it was "extremely disappointed" by 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," the company said. The article was updated to include Kyndryl's comment.