Why is sovereign washing putting Europe at risk?

Digital sovereignty is the ability of any individual, country, or organization to control its own data, technology, and infrastructure. This has become a critical topic in Europe. Today, ensuring that sensitive data remains under European control has become increasingly problematic. 

Although digital sovereignty is about compliance, trust, security, and independence, "sovereign washing" threatens to blur the lines between marketing promises and legal realities. 

This is especially true when it comes to cloud services, particularly those offered by major US-based providers like Amazon, Google, and Microsoft.

Sovereign washing refers to the practice of foreign cloud companies marketing their cloud services as "sovereign" to appeal to customers concerned about cloud security, data privacy, and compliance with local regulations. However, many of these claims may overstate the actual level of data sovereignty in Europe. 

The term is a play on "greenwashing," a deceptive practice where companies may exaggerate or misrepresent their offerings to align with regional demands. This makes sense in the context of European data control, particularly in jurisdictions with stringent regulations, such as the European Union (EU).

Even if, for example, a US-based cloud service provider has local data centers within the EU that enable "sovereign clouds," they can still maintain foreign control over encryption keys, access policies, or operational processes. In other words, under US cloud jurisdiction (i.e., the US CLOUD Act). 

In this scenario, US-based cloud service providers might claim compliance with sovereignty requirements through contractual agreements rather than technical or structural controls. So, they are essentially using terms like "sovereign cloud" without providing genuine operational independence from foreign entities.

The Lawful Overseas Use of Data Act, also known as the CLOUD Act, is a US federal law enacted to enable law enforcement in the United States to access electronic data stored globally by US-based providers. 

Although the CLOUD Act aims to find a balance between American law enforcement demands, privacy protections, and international cooperation frameworks, it has significant implications for:

• Data privacy
• International law
• Cross-border digital investigations

It's essential to take a comprehensive approach to data sovereignty, as the CLOUD Act's impact and reach mean that true sovereignty can't be guaranteed solely by technical means as long as the provider remains under US cloud jurisdiction.

For example, Microsoft cancelled the email address of the International Criminal Court's chief prosecutor based on an executive order by US President Donald Trump. This event started a global debate about sovereign clouds, data privacy, and ownership.

In response to growing concerns, Microsoft has launched European sovereign cloud initiatives, including partnerships with European firms such as Bleu in France and SAP and Arvato in Germany. The company also introduced features such as Data Guardian and External Key Management, designed to give customers greater control over their data.

While these efforts represent steps toward addressing sovereignty concerns, critics argue that they fall short of full sovereignty. The core issue remains: Microsoft, as a US company, is still subject to US laws, and these legal realities limit the effectiveness of its "sovereign" cloud offerings.

Swiss law has a robust framework for achieving true digital sovereignty because of its strong data protection laws, neutrality, and jurisdictional independence. For example, the new Federal Act on Data Protection (nFADP), revised in 2023, is one of the strongest cloud data privacy frameworks globally, closely aligned with the EU's GDPR but with distinct advantages.

Like the GDPR, nFADP emphasizes individual control over personal data, requiring explicit consent, transparency, and rights such as data access, rectification, and deletion. However, unlike GDPR, which applies to any organization processing data of EU residents, the nFADP primarily governs data processed in Switzerland. This approach provides a more contained jurisdictional scope that circumvents conflicts with foreign laws, such as the US CLOUD Act.

The nFADP allows data transfers to countries with "adequate" protection (such as the GDPR). Still, Switzerland's neutrality and lack of US-style extraterritorial laws make it less susceptible to foreign government access. In other words, Swiss law provides GDPR-level protections without the complexities of EU-wide enforcement or exposure to US legal reach, ensuring data remains under Swiss jurisdiction.

Understanding the difference between marketing claims and legal realities is critical for organizations navigating the cloud landscape. While US cloud providers, such as Google Cloud Platform (GCP), Amazon Web Services (AWS), and Microsoft Azure, offer advanced features and localized services, the legal framework governing data access remains a significant barrier to true sovereignty.

Swiss law is well-suited for achieving true digital sovereignty due to its stringent data protection laws, political neutrality, robust judicial oversight, and the absence of extraterritorial laws (such as the CLOUD Act). 

Unlike the US and other European cloud providers, Swiss sovereign cloud solutions offer genuine data control by keeping data in Switzerland under local jurisdiction. For organizations prioritizing sovereignty, Switzerland provides a trusted alternative.