Microsoft recommits to boosting Europe with major tech pledges

Brad Smith, speaking in Brussels, outlined five commitments Microsoft is making to Europe. - Our economic reliance on Europe has always run deep - stated Smith. He stressed that the company's operations are "critically dependent" on the trust of, among others, countries and governments on the continent. He highlighted that these commitments are particularly relevant in "a time of geopolitical volatility."

He also added that the company "believes in trans-Atlantic ties that promote mutual economic growth and prosperity." - We were pleased the Trump administration and the European Union recently agreed to suspend further tariff escalation while they seek to negotiate a reciprocal trade agreement. We hope that successful talks can resolve tariff issues and reduce non-tariff barriers, consistent with the recommendations in the recent Draghi report - Smith indicated.

The President of Microsoft then outlined the five commitments to Europe:

1. Building a broad ecosystem of artificial intelligence and cloud computing across Europe;
2. Standing guard over Europe's digital resilience, even amid geopolitical instability;
3. Protecting European data privacy;
4. Helping protect and defend Europe's cybersecurity;
5. Contributing to strengthening Europe's economic competitiveness, including in terms of open software.

Smith explained in detail what each of these commitments entails. The most concrete announcement concerned the first commitment. - Today, we are announcing plans to increase our European datacenter capacity by 40% over the next two years - declared Smith. He explained that these plans will more than double the capacity of European data centres by 2027. This expansion involves data centres for government institutions, among others.

Brad Smith also addressed the issue of "geopolitical volatility" concerning the cloud. He explained that, according to Microsoft, governments might consider "additional options" in this area, including public funding for national projects. - We recognise the importance of a diversified technology ecosystem, and we are committed to collaborating with European participants across the tech ecosystem - emphasised Smith.

Speaking about data centres, Smith also addressed the issue of applicable law.

- They are permanent structures and subject to local laws, regulations, and governments. Like every citizen and company, we don’t always agree with every policy of every government. But even when we’ve lost cases in European courts, Microsoft has long respected and complied with European laws. We understand that European laws apply to our business practices in Europe, just as local laws apply to local practices in the United States and similar laws apply elsewhere in the world. This includes European competition law and the Digital Markets Act, among others. We’re committed not only to building digital infrastructure for Europe, but to respecting the role that laws across Europe play in regulating our products and services - noted the President of Microsoft.

He also declared that the company will establish a European board of directors, comprising local citizens, operating under local jurisdiction. This board would oversee data centres and their management.

In discussing the second commitment, Smith briefly commented on the tariffs imposed by Donald Trump's administration on the European Union. - We in fact believe that even amidst current trade and tariff disputes, there is a strong consensus in Washington supporting the sustained flow of digital services from the United States to Europe - the company representative assessed.

It is important to note that tariffs do not cover digital services, and maintaining such a status benefits the USA. The European Union is the largest single export market for digital services for the United States, accounting for about one-quarter of the total ($187 billion in 2022). The USA also has a significant trade balance surplus in digital services with the EU. This could change if the EU decided - in response to Trump's tariffs - to impose its tariffs, potentially on social media or other services.

This part of the speech also included a key declaration regarding potential geopolitical upheavals, including the escalation of the trade conflict.

In the unlikely event we are ever ordered by any government anywhere in the world to suspend or cease cloud operations in Europe, we are committing that Microsoft will promptly and vigorously contest such a measure using all legal avenues available, including by pursuing litigation in court - announced Smith.

He highlighted that this commitment will be legally binding for all of Microsoft. He added that the company has a documented history of lawsuits against authorities in the USA, including the decision of the US Supreme Court during Trump's first term, concerning rights for immigrant employees. - When necessary, we’re prepared to go to court - stated Smith.

The company also declared a contingency plan in case it were forced to suspend operations in Europe. - We will designate and rely upon European partners with contingency arrangements for operational continuity in the unlikely event Microsoft were ever required by a court to suspend services - said Smith.

He added that this is already offered in countries like France and Germany. - We will store back-up copies of our code in a secure repository in Switzerland, and we will provide our European partners with the legal rights needed to access and use this code if needed for this purpose - explained the Microsoft representative.

The speech also included the announcement of taking legal action in cases where it would be necessary to protect European data from unauthorised access. As Smith explained, such cases have already occurred when demands for access were contrary to European law. He recalled that in 2018, the US Congress passed legislation allowing opposition to demands from US law enforcement authorities if they conflict with EU law.

Brad Smith, during his speech about cybersecurity, also addressed the issue of the war in Ukraine. He stressed that the company "immediately helped evacuate Ukraine’s critical data and technology services to our datacenters across Europe", ensuring continuity of services for the country.

- In addition to safeguarding the country’s data, we immediately helped Ukraine’s officials and citizens defend their nation from Russian cyberattacks. Since the start of the war, Microsoft has provided more than $500 million of free technology and financial assistance to Ukraine and has sustained our substantial support to this day. Without interruption, we have provided cybersecurity support to NATO, Ukraine, and other European governments, including by sharing cybersecurity threat intelligence, protecting elections, and disrupting attacks against European governments, companies, and citizens - Smith recalled.

He emphasized that since then, cyber-attacks against European countries have intensified, particularly from Russia, China, Iran, and North Korea. Therefore, the company is appointing a new security director for Europe to ensure compliance with EU regulations, among other responsibilities. An independent auditor will also be appointed to verify and approve Microsoft's technological commitments in Europe.

- Artificial intelligence offers what may become the most powerful tool for people in the history of humanity. And like all tools, there will be some who will seek to turn it into a weapon - assessed Smith. In this regard, he assured that Microsoft will make every effort to "help Europe" harness the potential of AI.

- We will need to partner with smaller and larger companies alike. We will need to support governments, non-profit organizations, and open-source developers across the continent. And we will need to listen closely to European leaders, respect European values, and adhere to European laws. We are committed to doing all these things well - declared Smith.

- As we celebrated Microsoft’s 50th birthday earlier this month, we recognised that our longstanding presence in Europe has been a lynchpin of our success. Europe has treated us well. Our support for Europe has always been—and always will be—steadfast - emphasised Brad Smith.