Microsoft pledges unwavering support with Europe-focused plans

Brad Smith presented a list of five commitments Microsoft made to Europe in Brussels. “Our economic reliance on Europe has always run deep,” Smith said. He emphasized that the company's operations are "critically dependent" on the trust of countries and governments on the Old Continent. He stressed that the list of five commitments relates to "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 pointed out.

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

1. Building a broad ecosystem of artificial intelligence and cloud computing across Europe;
2. Upholding Europe's digital resilience even in conditions of geopolitical instability;
3. Protecting European data privacy;
4. Assisting in protecting and defending Europe's cybersecurity;
5. Contributing to strengthening Europe's economic competitiveness, including in open software.

Smith detailed what lies behind each of these points. The announcement concerning the first commitment was most specific. “Today, we are announcing plans to increase our European datacenter capacity by 40% over the next two years,” the manager declared. He explained that these plans will more than double the capacity of European data centers by 2027. He noted that this includes data centers for government institutions.

Brad Smith also addressed the issue of "geopolitical volatility" in the context of the cloud. He explained that, according to Microsoft, governments will likely consider "additional options" in this area, including public financing for domestic offers. “We recognize the importance of a diversified technology ecosystem, and we are committed to collaborating with European participants across the tech ecosystem,” Smith emphasized.

Speaking about data centers, Smith also touched on the issues 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,” the President of Microsoft indicated.

He also declared that in the future, the company will appoint a European board of directors, consisting of local citizens, operating under the jurisdiction of local law. This board would oversee data centers and their management.

In the section addressing the second commitment, Smith briefly commented on the issue of tariffs imposed by Donald Trump, including those 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 worth emphasizing, however, that tariffs do not include digital services, and maintaining this state is in the interest of 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 surplus in digital services with the EU. This could change if the Union decided—to impose its tariffs on, for example, social media or other services—in response to Trump's tariffs.

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

“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,” Smith declared.

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

The company also declared a plan in the event it was 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,” Smith said.

As he added, this is already offered in 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.

In the speech, there was also an announcement of taking legal action in cases where it would be necessary to protect European data from unauthorized access. As Smith explained, such cases have already occurred when similar access requests were inconsistent with European law. He recalled that in 2018, the US Congress passed regulations allowing opposition to requests from US law enforcement agencies if they conflict with EU law.

Brad Smith, in his speech, addressed the issue of the war in Ukraine in the section on cybersecurity. He emphasized that the company "immediately helped evacuate Ukraine’s critical data and technology services to our datacenters across Europe," ensuring service continuity 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 reminded.

He emphasized that since then, cyberattacks on European countries have intensified, including attacks from Russia, China, Iran, and North Korea. Therefore, the company is appointing a new Director of Security for Europe, whose responsibilities include ensuring compliance with EU regulations. An independent auditor will also be appointed to verify and approve Microsoft’s technology 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,” Smith assessed. On this issue, he assured that Microsoft would make every effort to "help Europe" leverage AI's potential.

“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,” Smith declared.

“As we celebrated Microsoft’s 50th birthday earlier this month, we recognized 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," emphasized Brad Smith.