Digital and technology policy and national sovereignty

House of Lords Library | James Tobin

The United Kingdom is facing critical challenges to its national sovereignty as global digital infrastructure becomes increasingly concentrated under the control of a small number of American and Chinese technology conglomerates. This dependency exposes British public sector data and critical IT systems to extraterritorial legal jurisdictions and potential service disruptions during geopolitical disputes.

Historically, the physical, code, and data layers of the digital economy have evolved without centralized national oversight, leaving European states reliant on foreign cloud providers like Microsoft and Amazon Web Services. Recent diplomatic friction over the Clarifying Lawful Overseas Use of Data (CLOUD) Act 2018 and the implementation of digital services taxes have intensified these vulnerabilities. While some European nations advocate for strict data localization, the British government has avoided an explicit digital sovereignty strategy, opting instead to build domestic artificial intelligence capabilities while maintaining international collaborations to secure its technological future.

Comment

The extraterritorial reach of the United States Clarifying Lawful Overseas Use of Data (CLOUD) Act 2018 exposes a fundamental legal vulnerability in European digital defence architectures. By asserting jurisdiction over data stored abroad by American-headquartered firms, this framework effectively bypasses traditional mutual legal assistance treaties. Consequently, contractual guarantees of local data residency offered by providers like Microsoft France fail to provide absolute legal insulation. This friction forces European governments into a strategic choice between accepting systemic exposure to Washington's judicial overreach or undertaking the immense capital cost of developing fully independent sovereign cloud alternatives.

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