Strengthening Continental Autonomy Through the Proposed EU Cloud and Artificial Intelligence Development Act

The European Union is currently navigating a period of significant technological transition, aiming to reduce its reliance on foreign digital infrastructure while enhancing its internal capabilities. Central to this strategy is the proposed Cloud and AI Development Act, or CADA. This legislative framework is designed to foster a more robust ecosystem for sovereign digital services within the continent. Currently, the European market is heavily influenced by a small number of American firms, which control nearly 70% of the sector, whereas local providers account for only about 15%. To address this imbalance, Telefónica has released a detailed policy brief suggesting specific refinements to ensure that these regulatory ambitions result in actual industrial growth and increased investment.

One of the primary recommendations focuses on the definition of sovereignty within digital services. Telefónica argues that true independence is not merely a matter of where data centers are located or where a company is registered. Instead, it must be measured by who maintains genuine control over vital operations, such as encryption management and access protocols. By establishing verifiable standards for control, Europe can continue to collaborate with global technology partners while ensuring that critical components remain under regional oversight. Additionally, the telecommunications company emphasizes the importance of edge computing. Unlike centralized data hubs, edge computing processes information closer to the source, such as in medical facilities or industrial sites. Integrating this distributed model into CADA’s regulatory scope could leverage Europe’s existing network infrastructure to improve service resilience and reduce latency.

Efficiency in implementation is another core priority. The proposal suggests that CADA should recognize existing national security certifications, such as Spain’s ENS Alto, to avoid redundant administrative burdens and costs for providers. Furthermore, the role of public procurement is highlighted as a vital tool for industrial policy. By creating a steady demand for sovereign services, public administrations can encourage the growth of local alternatives. However, exemptions to these rules should be limited and transparent to prevent market incumbents from maintaining an unfair advantage. Finally, while CADA includes provisions to extend these requirements to the private sector, specifically those under the NIS2 Directive, Telefónica cautions that such extensions should be rare and based on clear evidence of risk. The ultimate goal is to transform Europe’s strategic goals into a tangible, competitive digital landscape that offers both autonomy and a wide range of choices for consumers and businesses alike.

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Read original at Telefónica Newsroom.