Netherlands blocks U.S. takeover of DigiD operator Solvinity over security concerns

State Secretary Aerdts of Economic Affairs has blocked U.S. company Kyndryl from acquiring Solvinity, the Dutch company behind DigiD, citing the "need to protect the public interest."

Solvinity plays a key role in operating DigiD, the digital identity system used for access to Dutch government services. The proposed takeover by Kyndryl had triggered prolonged concern in the Tweede Kamer, where lawmakers questioned the implications of foreign ownership over critical Dutch digital infrastructure.

The Cabinet member said he made the decision based on the advice of the regulatory agency, Investment Screening Bureau (BTI), which monitors all mergers, acquisitions, and investments for compliance with the Insufficient Controls of Telecommunications Act (WOZT).

“The BTI concluded that this intended acquisition of Solvinity may pose a risk to the public interest,” Aerdts wrote to parliamentarians. He said this review was based on WOZT's legal requirements, not specifically on the fact that an American company was behind the acquisition.

“The BTI advised me to prohibit this acquisition completely. I have adopted and accepted this advice. Given that I recently received serious indications that the completion of the transaction was imminent, I saw no other option than to take this decision now to protect the public interest,” Aerdts wrote.

“I wish to emphasize that the investment screening based on the WOZT conducted by the BTI is country-neutral, risk-based, and proportionate, and an objective screening solely to prevent risks to the public interest. The Netherlands attaches great value to the presence of foreign technology companies—especially American ones—and their contribution to the Dutch economy and digital infrastructure,“ Aerdts continued.

Those concerns focused partly on U.S. laws that can allow the American government to block access to data or demand its disclosure, raising questions about the security and sovereignty of sensitive Dutch government systems if they were owned by a U.S. company.

The acquisition of Solvinity was initiated when Kyndryl announced in November 2025 that it had reached an agreement to buy Solvinity. The deal was subsequently reviewed by Dutch regulators, and the Authority for Consumers and Markets (ACM) cleared it in February 2026, allowing the takeover process to proceed.

Many opposed the move. At the start of May, the situation escalated further when a group of Dutch technology experts, journalists, scientists, and privacy advocates initiated legal action seeking a court ruling to intervene in the process. They requested recognition as stakeholders to push for a judicial block on the takeover, also arguing that the acquisition could expose sensitive government and citizen data to U.S. jurisdiction.