Microsoft has cleared a major milestone, completing its EU Data Boundary to ensure EU cloud data is stored and processed within the EU and European Free Trade Association (EFTA).
The EU has stricter data privacy laws than the U.S., a point that has led to challenges for U.S. cloud providers operating within the bloc. With President Trump threatening tariffs on long-standing U.S. allies, tension over data sovereignty is at an all-time high.
To address concerns, Microsoft recently announced it had completed its EU Data Boundary, ensuring EU data sovereignty is protected.
With the completion of the boundary, our European commercial and public sector customers are now able to store and process their customer data and pseudonymized personal data for Microsoft core cloud services — including Microsoft 365, Dynamics 365, Power Platform, and most Azure services — within the EU and EFTA regions. In addition, Microsoft will store professional services data from technical support interactions for the core cloud services within the EU and EFTA regions.
This milestone is the culmination of a massive, multi-year engineering effort across hundreds of Microsoft product teams and thousands of developers around the globe. The EU Data Boundary reflects Microsoft’s commitment to delivering unmatched cloud services that support European transparency, protect privacy, and enhance customer control. It’s a reflection of our commitment to Europe and is part of a wide range of residency capabilities and solutions we provide to our customers.
The process began in January 2023, with the latest phase completed in February 2025. Microsoft says the EU Data Boundary builds on more than 40 years of dedication to Europe, including $20 billion in AI and cloud infrastructure investments on the continent over the past 16 years.
Microsoft says there are still some specific circumstances where data may be transferred to the U.S., but these instances involve cybersecurity threats and the company will be transparent it.
Microsoft is deeply committed to cybersecurity, prioritizing the protection of our customers and the broader global digital ecosystem. Through the Secure Future Initiative (SFI), Microsoft integrates security into every aspect of our operations, from product design to daily practices. This global effort is essential in combating increasingly complex cyberattacks, ensuring a safer digital environment for our European customers and organizations worldwide.
In limited security instances that require a coordinated global response, essential data may be transferred with robust protections that safeguard customer data. In these circumstances, Microsoft provides transparent information and implements comprehensive security measures, including encryption, strict access controls, and other resilient protections. This global intelligence allows Microsoft to provide real-time alerts and security response mitigation, ensuring customers remain protected no matter where a threat originates.
Microsoft’s Data Processing a Growing Concern for the EU
Microsoft’s completion of its EU Data Boundary is an important step for the company, especially in view of recent issues.
The EU Commission found in 2024 that it was itself in violation of the GDPR for its use of Microsoft 365. The Commission ordered that its data flow to Microsoft be suspended by December 9, 2024.
Similarly, the German state of Schleswig-Holstein announced in 2024 that it was migrating some 30,000 computers to Linux and LibreOffice, citing digital sovereignty as the motivating factor.
Independent, sustainable, secure: Schleswig-Holstein will be a digital pioneer region and the first German state to introduce a digitally sovereign IT workplace in its state administration. With a cabinet decision to introduce the open-source software LibreOffice as the standard office solution across the board, the government has given the go-ahead for the first step towards complete digital sovereignty in the state, with further steps to follow.
We have no influence on the operating processes of such [proprietary] solutions and the handling of data, including a possible outflow of data to third countries. As a state, we have a great responsibility towards our citizens and companies to ensure that their data is kept safe with us and we must ensure that we are always in control of the IT solutions we use and that we can act independently as a state.
Microsoft’s EU Data Boundary should be a major benefit for the company, paving the way for it to meet the EU’s regulatory requirements moving forward.
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