The Netherlands blocks acquisition of DigiD: security concerns

The proposed acquisition of Solvinity—the company that plays a key role in DigiD’s underlying infrastructure—by the American IT firm Kyndryl has been called off. State Secretary Willemijn Aerdts (Economic Affairs) has blocked the deal because she believes it poses a risk to the public interest.

Solvinity provides cloud and storage services on which DigiD operates. These systems enable the secure exchange of data between government agencies and organizations such as the Tax and Customs Administration, health insurers, and pension funds.

Concerns in the House of Representatives

Although Solvinity is originally a Dutch company, it is now under foreign ownership. The planned acquisition by Kyndryl raised concerns in the House of Representatives. A key factor in this was the fact that U.S. law can, in certain cases, grant access to data from companies with a U.S. parent organization.

Transaction blocked

The Investment Screening Office (BTI) reviewed the deal for potential risks to national security and recommended blocking the acquisition entirely. The State Secretary has adopted that recommendation and blocked the transaction.

Kyndryl disappointed

Kyndryl, however, maintains that the data of Dutch citizens would remain fully protected following the acquisition. The company says it is disappointed and believes the decision is heavily politically motivated.

The Netherlands is open to foreign tech

The State Secretary, on the other hand, emphasizes that the BTI’s assessment was conducted carefully, objectively, and with a focus on risk. She notes that the Netherlands remains open to foreign technology companies, including those from the United States, due to their role in the digital infrastructure and economy.