EU Firms Urged to Rethink US Cloud Reliance Amid Legal and Data Risks

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A growing number of European businesses are being warned about the legal risks of storing data with US cloud providers such as AWS, Microsoft Azure, and Google Cloud. The core conflict lies between the EU's GDPR, which treats data protection as a fundamental right, and the US CLOUD Act, which allows American authorities to compel US companies to hand over data regardless of where it is stored. The European Court of Justice reinforced this concern in its landmark 'Schrems II' ruling in July 2020, striking down the EU-US Privacy Shield agreement on the grounds that US surveillance laws cannot guarantee adequate data protection standards. Standard encryption offers limited protection, as cloud providers who manage the encryption keys can be legally forced to decrypt and disclose data. Experts and IT professionals are increasingly framing digital sovereignty — the ability to independently control one's own digital infrastructure — not as a political ideal but as a practical business risk management priority.

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