The Dutch government has blocked the sale of Solvinity, the company that manages its online services portal DigiD, to the US-based tech giant Kyndryl amid concerns that millions of citizens’ private data could be compromised.
Willemijn Aerts, the junior minister responsible for the digital economy, vetoed the takeover “to protect the public interest”. She had asked the BTI, the agency that vets cross-border investments, to assess the risk of the deal to national security.
Solvinity, a Dutch-based IT services company, operates the hosting platform for DigiD, which is used in the Netherlands as a secure gateway to access confidential records online. Millions of people use DigiD to communicate with the tax office, pension providers, health insurers and local councils.
Its majority owners, British private equity firm Vitruvian Partners, agreed to sell Solvinity to Kyndryl in a deal announced last November.
The sale was cleared by the competition regulator ACM, while junior home affairs minister Eric van der Burg extended Solvinity’s contract to run DigiD, which is owned by the government agency Logius, last month.
US Cloud Act
The screening was the only way left for the government to stop the deal, despite MPs and security experts warning that it would bring people’s private information within the scope of the US Cloud Act.
The law gives US authorities the power to compel American-owned companies to hand over data they store, even if the servers are in Europe.
Aerdts, a minister for the liberal D66 party, said BTI’s investigation was “country-neutral, risk-based and proportionate”. “The Netherlands values the presence of foreign technology companies, including American ones in particular, and their contribution to the Dutch economy and digital infrastructure.”
She said the government would have discussions with Solvinity in the coming weeks about the company’s briefing and offered to organise a confidential technical briefing for MPs.
