The Netherlands has officially blocked the US takeover of the company that keeps DigiD running, with the government’s investment watchdog recommending a full ban on national security grounds.
Months of parliamentary hand-wringing over DigiD’s fate have finally produced a definitive answer.
The Dutch government has stepped in to stop Kyndryl (a New York-listed IT giant) from acquiring Solvinity, the cloud company that stores all the data powering your DigiD.
What is Solvinity and why does it matter?
If DigiD is the key to Dutch bureaucratic life, Solvinity is the safe where all the keys are kept. The Amsterdam-based company stores the data that allows DigiD to communicate with the Belastingdienst (tax office), health insurers, pension funds, and other essential services.
Without Solvinity doing its job quietly in the background, none of that works. Which is precisely why the prospect of an American company owning it set off alarm bells across the Tweede Kamer (House of Representatives) earlier this year.
Why the DigiD takeover was banned
State Secretary Willemijn Aerdts (D66, Economic Affairs) referred the proposed deal to the Bureau Toetsing Investeringen (BTI — Investment Review Bureau), which evaluates proposed acquisitions for national security risk. The BTI’s conclusion was unambiguous: block it entirely.
Aerdts accepted that advice in full, citing the need to protect “the public interest.” She was at pains to stress that the BTI’s process was “country-neutral, risk-based, and proportional,” and that the Netherlands continues to value American tech companies and their contribution to the Dutch economy.
US law is at the heart of the concern. American legislation can compel US-owned companies to hand over data to the US government, or even to cut off services entirely, giving Washington theoretical leverage over Dutch citizens’ access to their own digital government.
Kyndryl hits back
NOS reports that Kyndryl has responded by saying it is “extremely disappointed” by the decision, and has described the process as “politicised.” The company had consistently maintained that Dutch data would not be at risk under its ownership.
Solvinity is currently in British hands; while the company is Dutch in origin, it was already foreign-owned before Kyndryl came along.
It’s worth noting that Dutch MPs had already flagged this risk back in January, warning that losing control of DigiD’s infrastructure could let Washington “shut down our digital government with one push of a button.”
Today’s decision suggests the government agreed.
Do you think the Netherlands was right to block the Kyndryl takeover, or is this protectionism dressed up as security policy? Let us know in the comments.
Yes, that was the right move. The current government of the USA cannot be trusted.