Dutch company Solvinity operates a platform for the country's DigiD app, which allows Dutch people to authenticate themselves online when making medical appointments, buying real estate or contacting public authorities.
In November, U.S. company Kyndryl announced it would acquire Solvinity, prompting fears that a key Dutch online identification tool would come under foreign control. Concerns about the European Union's dependence on American technology have grown across Europe.
In a letter to the national parliament published on Tuesday, Secretary of State for the Digital Economy Willemijn Aerdts said the country's investment control body had recommended the government block the takeover. The purchase was deemed to pose a “potential threat to the public interest.”
The government decided on Monday to accept the recommendation and block the takeover, Aerdts said.
“The Netherlands attaches great importance to the presence of foreign, especially US, technology companies and their added value to the Dutch economy and digital infrastructure, but at the same time maintains an independent investment control framework aimed at protecting the public interest that applies equally to all investors, regardless of their country of origin,” the letter reads.
The decision was made a week before the European Commission is scheduled to announce the technological sovereignty package, a set of proposals aimed at reducing Europe's dependence on foreign technologies in the areas of cloud computing, microchips and artificial intelligence.
Kyndryl did not respond to a request for comment prior to publication.
