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TL;DR
European sovereignty testing for cloud and AI providers hinges on a unique 24% ownership rule. This article explains what the rule is, how it impacts provider control, and why it matters for data sovereignty and legal jurisdiction.
European cybersecurity authorities have implemented a novel sovereignty test for cloud and AI providers, based on a strict 24% ownership limit for foreign control. This measure aims to ensure legal sovereignty over data stored within the EU, directly impacting how providers structure ownership and control. The rule is a key development in European efforts to safeguard data from extraterritorial legal reach, and it is now shaping provider compliance strategies.
The sovereignty test, introduced by France’s national cybersecurity agency ANSSI as part of the SecNumCloud qualification, measures ownership control through a simple arithmetic cap: foreign ownership must not exceed 24% individually, or 39% collectively. This control test is unique because it is expressed as a numerical threshold, not a security or policy control, making it highly transparent and checkable from a cap table.
As of mid-2026, around ten providers hold an active SecNumCloud qualification, with several more in the pipeline. These providers include major French and European cloud firms such as OVHcloud, Outscale, Oodrive, and Scaleway. The rule effectively mandates that providers must be primarily owned by EU-based entities to qualify, especially for hosting sensitive public-sector data under France’s Cloud au Centre doctrine. US-based hyperscalers like AWS cannot meet the ownership control requirement in their native form, leading to the creation of joint ventures and control arrangements that comply with the 24% limit.
This ownership cap is significant because it explicitly links legal sovereignty to ownership structure, rather than relying solely on security controls or contractual clauses. It is designed to prevent non-EU entities from exerting control that could trigger extraterritorial laws like the CLOUD Act, which can compel data access regardless of security certifications.
The 24% rule: why most “sovereign cloud” certifications don’t test sovereignty
ISO 27001. SOC 2. BSI C5. Gaia-X. Every badge real, audited, correctly displayed — and not one answers the question that decides the deal: can a foreign government compel your data? Exactly one European framework tests that. It does it with a number.
C5 does cover place of jurisdiction, data location & disclosure obligations. It requires you to declare which law reaches you. C5 tells you the gun is in the room.
Requires that no non-EU law can reach you at all — enforced by the ownership cap. SecNumCloud requires there be no gun. That’s the whole difference.
The proposed Cloud and AI Development Act (COM(2026) 502) would set four Union assurance levels for public procurement. Its own recitals concede the point: Cybersecurity Act certification “is not suited for addressing sovereignty concerns.” National labels won’t be banned — but a SecNumCloud provider would still need separate Article 17 recognition. If it passes, the badge on the vendor’s website stops mattering and the assurance level starts. Meanwhile ANSSI + BSI have jointly committed to common criteria specifying where failure is disqualifying.
Microsoft showed the gap better than any critic: May 2025 — encryption makes access “technically impossible.” One month later — cannot guarantee immunity from US authorities. Thirty days between the marketing and the law. SecNumCloud doesn’t ban American technology — it forces a change of control over it (hence S3NS = Thales+Google, Bleu = Capgemini+Orange on Azure). Is it also protectionism? Partly, yes — and that critique is exactly why EUCS High+ died. Both things are true. Don’t ask if a provider is “sovereign” — the word has been marketed into meaninglessness. Ask the arithmetic: who owns you, and what law reaches you? Then check whether the answer is above or below 24% — including for the European champions nobody has asked.
Implications of the 24% Ownership Cap for European Data Sovereignty
The 24% ownership rule represents a fundamental shift in how European authorities enforce data sovereignty. It moves beyond traditional security certifications, focusing instead on control and legal jurisdiction. For providers, this means restructuring ownership or control arrangements to meet sovereignty criteria, often through joint ventures or local ownership. For European users, it offers a clearer assurance that data stored within compliant providers remains under EU legal control, reducing exposure to foreign extraterritorial laws. This development could influence global cloud strategies, as providers seek to access the lucrative European market while respecting sovereignty requirements.
Moreover, the rule underscores the importance of legal sovereignty in the evolving landscape of data regulation. It signals a move toward transparency and control over ownership, which could set a precedent for other jurisdictions seeking to limit foreign control over critical infrastructure and data assets.
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European Sovereignty Testing and the Rise of Control-Based Certification
European efforts to enhance data sovereignty have increasingly focused on legal control, with certifications like SecNumCloud and standards such as C5 emphasizing compliance with local laws and jurisdictional transparency. The introduction of the ownership cap as a control measure builds on these trends, offering a tangible, arithmetic threshold that directly measures control rather than relying solely on security practices.
Historically, certifications like ISO 27001 and C5 have demonstrated security practices but did not address jurisdictional control explicitly. The SecNumCloud scheme, created by ANSSI in 2016, introduced a more prescriptive approach, including legal sovereignty requirements such as EU data domicile and immunity from non-EU extraterritorial law. The 24% rule is the latest evolution, making ownership a quantifiable and enforceable criterion.
This approach aligns with recent European policies emphasizing data localization and sovereignty, especially under frameworks like NIS2 and the Cloud Act’s legal reach.
“The SecNumCloud qualification is not just a security certificate; it guarantees legal sovereignty and compliance with EU control requirements.”
— ANSSI spokesperson
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Unresolved Questions About Implementation and Enforcement
It remains unclear how strictly the 24% ownership cap will be enforced across different provider structures, especially in complex joint ventures or indirect control arrangements. The precise legal and regulatory mechanisms for verifying compliance at scale are still under development, and it is not yet confirmed how disputes or non-compliance will be handled. Additionally, the impact on US-based hyperscalers and their strategies for European market entry continues to evolve, with ongoing negotiations and legal challenges.
European cloud security certification
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Next Steps in European Control and Certification Standards
Regulators and certification bodies are expected to refine enforcement procedures and develop clearer guidelines for ownership verification. Several providers are actively pursuing SecNumCloud qualification, with more expected to follow as the market adapts. Legal debates and potential legislative adjustments may also shape how the 24% rule is applied, especially concerning joint ventures and indirect ownership structures. European authorities will likely increase oversight to ensure compliance, reinforcing the control-based sovereignty framework.
ownership cap compliance software
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Key Questions
What is the 24% ownership rule in European sovereignty testing?
The 24% ownership rule limits foreign control over cloud and AI providers to ensure legal sovereignty, requiring that no single foreign entity owns more than 24% of the provider, or combined foreign ownership does not exceed 39%.
How does the ownership cap impact US tech giants operating in Europe?
US-based companies cannot meet the ownership control requirement in their native form, prompting them to establish joint ventures or control arrangements that comply with the 24% limit to qualify for sovereignty certifications.
Does a certification like C5 or SecNumCloud guarantee immunity from legal jurisdiction?
No. While C5 certifies security controls, it does not address jurisdictional immunity. SecNumCloud explicitly requires legal sovereignty measures, including ownership controls, to prevent extraterritorial legal reach.
What are the practical challenges providers face in meeting the 24% rule?
Providers must carefully structure ownership and control arrangements, often through complex joint ventures, to stay below the ownership thresholds, which can be operationally and legally complex.
What is the significance of the ownership control measure for European data security?
The control measure directly links legal sovereignty to ownership structure, providing a clear, checkable standard that enhances data protection from foreign legal interference.
Source: ThorstenMeyerAI.com
