Dutch government blocks sale of DigiD operator Solvinity to US tech firm due to data security concerns

The Dutch government has blocked the sale of Solvinity, which operates the hosting system for the country’s DigiD online services portal, to US-based tech firm Kyndryl because of concerns about the security of citizens’ personal data, Dutch News reported Tuesday.

Junior Minister for Digital Economy Willemijn Aerts blocked the takeover “to protect the public interest,” after ordering a security assessment from the Bureau for Investment Screening (BTI).

Solvinity provides the hosting infrastructure for DigiD, a secure online portal used by millions in the Netherlands to access tax records, pensions, health insurance and local government services.

The company is owned by British private equity firm Vitruvian Partners, which agreed in November to sell it to Kyndryl.

The Netherlands Authority for Consumers and Markets (ACM) has already approved the deal, and the contract for Solvinity to operate DigiD was extended last month by the Interior Ministry.

The government said the security screening was the only remaining way to block the transaction, despite concerns by lawmakers and security experts about the US Cloud Act.

The law allows American authorities to require US companies to hand over data, even if it is stored outside the US.