Small and medium-sized enterprises (SMEs) in Germany do not complain. They work. They adapt to external circumstances and are successful with their products against all odds. Many of them worldwide. This is the secret of their success. But the current economic situation gives cause for concern. We launched our DATEV SME Index a year ago. Our index provides up-to-date, fact-based and broad insights into German SMEs in a way that has not been available before: it is based on the advance VAT returns of more than one million SMEs and the payroll accounts of more than eight million employees. As an IT service provider for the tax consulting profession, this effectively lets us look directly into the engine room of German SMEs. But this detailed view is not very pleasant at the moment. The figures we publish each month based on data from tax advisors paint an almost worrying picture. The increase in the minimum wage that has already been decided is likely to exacerbate this situation for small and micro-enterprises. Sales are falling, wages are rising The German economy is in a difficult situation. Since September 2024, we have observed declining sales in SMEs. Concurrently, wages are increasing. Our latest statistics show that this trend is continuing — in all German federal states, industries and company sizes. There is currently no indication of a change in this trend. As previously described, SMEs rarely voice dissatisfaction. Instead, they seek pragmatic solutions. This challenging situation is no different. There are in fact a number of ways to resolve this issue. Many SMEs are looking to the federal government with high expectations. They expect it to pursue business-friendly policies to strengthen the backbone of the German economy. Small and medium-sized companies represent 99 percent of it and employ around half of the workforce in Germany. Without relief and incentives, the existence of many SMEs is increasingly at risk. Above all, we need to reduce bureaucracy and implement a bureaucracy moratorium: meaning the standardization and reduction of documentation and retention requirements. > Above all, we need to reduce bureaucracy and implement a bureaucracy > moratorium: meaning the standardization and reduction of documentation and > retention requirements. Financial incentives for greater productivity The regulatory frenzy of recent decades in Germany and in the EU makes it difficult for companies to catch their breath. It not only costs SMEs time and money, but it also hinders innovation. But there are now initial indications that something is being done about this. The importance and necessity to modernize the administration has been recognized and will be supported financially. A separate ministry for digital transformation and state modernization is a positive first step. > The German government has also already decided on the so-called investment > booster. However, this will only help to a limited extent The German government has also already decided on the so-called investment booster. However, this will only help to a limited extent. The investment booster allows for declining balance depreciation of up to 30 percent, which enables companies to write off higher amounts, especially in the first few years. This is intended to accelerate investment and secure liquidity for businesses. However, this only helps if there is still enough substance or capital available for further financing. And in many cases, this is no longer the case for SMEs. In order to boost productivity, financial incentives must be provided as quickly as possible. It is our hope that there will be extensive investments in infrastructure and the digitalization of administration as well. Artificial intelligence creates greater efficiency Another encouraging sign: new technological advancements facilitate operations for business. Artificial intelligence (AI) is more than just a buzzword. As Germany’s second largest software company, we are dedicated to developing innovative products and solutions for tax firms, so that they can provide even more exceptional counsel to their clients — mostly small and medium-sized businesses. For me, it is evident that AI will positively transform work in tax consulting firms, creating significant opportunities. AI helps to simplify monotonous, repetitive tasks, allowing for more efficient workflow. It is a valuable tool for supporting individuals rather than replacing them. This is especially important in a time of pressing issues such as skilled worker shortages. The use of AI thus also offers new opportunities for all companies that wish to prioritize their core business over bureaucracy. Digital and AI-supported processes with tax advisors will provide sustainable support in this. The acceptance and use of AI tools is steadily increasing in tax consulting firms. Among the most widely used industry-specific offerings, the DATEV appeal generator and specialist research tools are highly regarded. It is clear that we have only just begun to see the full extent of the situation. We are working every day on new solutions that make it easier for tax consulting firms to better advise their client companies to improve their successes. We also use our detailed knowledge that we generate from our DATEV SME Index. > The smart use of AI can also enhance the success of German SMEs and strengthen > their ability to compete globally — despite existing regulatory challenges, > bureaucratic hurdles and complicated tax systems. Ultimately, it depends on how we deal with the challenges in our daily work. How we successfully shape the path to the digital future with the possibilities offered by AI. We have learned from major American software providers over the past 20 years that those who best understand the data business enjoy great economic success. Now comes the second chance. The smart use of AI can also enhance the success of German SMEs and strengthen their ability to compete globally — despite existing regulatory challenges, bureaucratic hurdles and complicated tax systems. So, enough whining. Let’s proceed! Robert Mayr, tax advisor, auditor and doctor of business administration, is CEO of DATEV eG since 2016. From 2014 to 2016, he was on the board of the Nuremberg-based data processing cooperative, responsible for finance and purchasing, and had already been responsible for internal data processing and production since 2011. After studying business administration at Ludwig Maximilian University in Munich, he began his professional career as a consultant at Treuhandanstalt Berlin. Mayr worked for Deloitte from 1994 to 2001, after which he spent nine years as managing partner of Solidaris Revisions-GmbH in Munich. Since 2012, Mayr has been vice president of the Nuremberg Chamber of Tax Consultants. DATEV eG is a data processing cooperative with more than 850,000 customers. Founded in 1966, it now employs a staff of about 9,000, working at its headquarters in Nuremberg and 22 branch offices throughout Germany. Its legal structure as a cooperative guarantees continuity, meaning no investor can buy DATEV. For more information on the DATEV Small and Medium-Sized Enterprises Index, please visit mittelstandsindex.datev.de (in German).

BRUSSELS — Almost 60 members of the European Parliament want to include a gift in the bloc’s next long-term budget: a phone with more storage for Ursula von der Leyen. Right-wing politicians filed an amendment on Thursday to the EU’s budget bill, telling the EU executive to “dedicate sufficient funding to provide the president of the Commission with a mobile phone with adequate storage capacity and appropriate IT support to ensure that messages are preserved without exception.” Von der Leyen got in hot water last month over a deleted 2024 text message she received from French President Emmanuel Macron that POLITICO reported had urged her to block the EU-Mercosur trade deal. The Commission said the message was auto-deleted, defending von der Leyen’s use of disappearing messages as being, in part, “for space reasons.” But tech experts debunked that defense as “a non-argument” and ” hard to believe,” because text messages hardly take any space on modern phones. The Commission president already faced an investigation earlier over text conversations with Pfizer’s Chief Executive Officer Albert Bourla about Covid-19 vaccine contracts which were never archived. Lawmakers are due to vote on the EU’s draft budget for 2026 at a plenary session in Strasbourg next week. The amendment on phone storage came from Germany far-right member Christine Anderson and Swedish hard-right member Charlie Weimers. It had been signed by 57 members of parliament on Thursday, largely from Weimers’ European Conservative and Reformists group, Anderson’s Europe Sovereign Nations and the far-right Patriots for Europe. The amendment urged the EU executive to mind “importance of keeping proper records of all official communications of the Commission.”

BRUSSELS — Two of Europe’s tech powerhouses tied the knot on Tuesday in a landmark deal that bolsters a push by politicians to reduce reliance on the United States for critical technology. Dutch microchips champion ASML confirmed it was investing €1.3 billion in French AI frontrunner Mistral, one of the few European companies that is able to go head-to-head with U.S. leaders like OpenAI and Anthropic on artificial intelligence technology.  It’s a business deal soaked in politics. Officials from Brussels to Paris, Berlin and beyond have called for Europe to reduce its heavy reliance on U.S. technology — from the cloud to social media and, most recently, artificial intelligence — under the banner of “tech sovereignty.”  “European tech sovereignty is being built thanks to you,” was how France’s Junior Minister for Digital Affairs and AI Clara Chappaz cheered the deal on X. Europe has struggled to stand out in the global race to build generative AI ever since U.S.-based OpenAI burst onto the scene in 2022 with its popular ChatGPT chatbot. Legacy tech giants like Google quickly caught up, while China proved its mettle early this January when DeepSeek burst onto the scene. European politicians can showcase the ASML-Mistral deal as proof that European consumers and companies still can rely on homegrown tools. That need has never been more urgent amid strained EU-U.S. ties under Donald Trump’s repeated attacks against EU tech regulation. But the deal also illustrates that while Europe can excel in niche areas, like industrial AI applications, winning the global consumer AI chatbot race is out of reach. EUROPE KEEPS CONTROL Tuesday’s deal brings together two European companies that are most closely watched by those in power. ASML, a 40-year-old Dutch crown jewel, has grown into one of the bloc’s most politically sensitive assets in recent years. The U.S. government has repeatedly tried to block some of the company’s sales of its advanced microchips printing machines to China in an effort to slow down Chinese firms.  Mistral is only two years old but has been politically plugged in from the start, with former French Digital Minister Cédric O among its co-founders.      When the company faced the need to raise new funding this summer, several non-European players were floated as potential backers, including the Abu Dhabi-based MGX state fund. There were even rumors Mistral could be acquired by Apple. Apple’s acquisition of Mistral would have been “quite negative” for Europe’s tech sovereignty aspirations, said Leevi Saari, EU policy fellow at the U.S.-based AI Now Institute, which studies the social implications of AI. “The French state has no appetite [for] letting this happen,” he added.  Getting financing from an Abu Dhabi-based fund, conversely, would have reinforced the perception that Europe can provide the millions in venture capital funding needed to start a company, but not the billions needed to scale it.  With this week’s €1.7 billion funding round led by ASML, Europe’s tech sovereignty proponents can breath a sigh of relief. “European champions creating more European champions is the way to go forward and it needs further backing from the EU,” said Dutch liberal European Parliament lawmaker Bart Groothuis in a statement. The deal is also what officials, experts and the industry want to see more of: one where startups are backed by an established European corporation rather than a venture capitalist. “A European corporation finally investing massively in a European scale-up from its industry, even [if] it [is] not directly tied to its core business,” said Agata Hidalgo, public affairs lead at French startup group France Digitale, on Linkedin. A French government adviser, granted anonymity to speak freely on private deals, said they felt “hyped” by the news after months of uncertainty due to Mistral’s refusal to publicly deny talks with Apple. The deal is also expected to avoid any close scrutiny from Europe’s powerful antitrust regulators, which in the past have intervened in mergers and deals to keep the market competitive. Tuesday’s deal is not a full takeover and does not need merger clearance. Nicolas Petit, a competition law professor at the European University Institute, said there was “nothing to see here unless the EU wants to shoot itself in the foot with a bazooka.” “It’s a non-controlling investment, and neither ASML [nor] Mistral AI compete in any product or service market,” he added. REALITY CHECK While the incoming Dutch investment goes a long way toward keeping Mistral in European hands, it also determines the path forward for the French artificial intelligence challenger.  Mistral had already been struggling “to keep up with the race for market share” with other large language models, Saari claimed in a blogpost published last week, in which he cited numbers suggesting that Mistral’s market share is “around 2 percent.”  “Mistral was known to face challenges both technically and in finding a business model,” said Italian economist Cristina Caffarra, who has been leading the charge for European tech sovereignty through the Eurostack movement. “It’s great they found a European champion anchor investor” that will, in part, “protect them from the [venture capital] model.” Tuesday’s deal could mean that Mistral will get more support to work on industrial applications instead of a consumer-facing chatbot that venture capitalists like to propagate.  “With Mistral AI we have found a strategic partner who can not only deliver the scientific AI models that will help us develop even better tools and solutions for our customers, but also help us to improve our own operations over time,” ASML CEO Christophe Fouquet wrote in a post on Linkedin.  ASML’s main customers are the world’s biggest microchips manufacturers, including Taiwan’s TSMC and America’s Intel. The company also has a wide network of industrial suppliers, which could be leveraged as well. For Mistral, catering to European industrial applications could strengthen its business. But it could also be seen as a tacit admission that in the global AI race, Europe has to pick its battles.  Francesca Micheletti and Océane Herrerro contributed reporting.

The organizations representing critical networks that keep the lights on, the water running and transportation systems humming across the U.S. are bracing for a possible surge of Iranian cyberattacks. Virtually every critical infrastructure sector is on high alert amid a deepening conflict between Iran and Israel, though no major new cyber threat activity has been publicly reported so far. As these groups proactively step up their defenses, it’s unclear whether Washington is coordinating with them on security efforts — a change from prior moments of geopolitical unrest, when federal agencies have played a key role in sounding the alarm. “Iranian cyber activity has not been as extensive outside of the Middle East but could shift in light of the military actions,” said John Hultquist, chief analyst for Google Threat Intelligence Group. As the conflict evolves — and particularly if the U.S. decides to strike Iran directly — “targets in the United States could be reprioritized for action by Iran’s cyber threat capability,” he said. During previous periods of heightened geopolitical tension, U.S. agencies, including the Cybersecurity and Infrastructure Security Agency, stepped up to warn the operators of vital U.S. networks about emerging threats. Ahead of Russia’s full-scale invasion of Ukraine in 2022, CISA launched its “Shields Up” program to raise awareness about potential risks to U.S. companies emanating from the impending war. Anne Neuberger, who served as deputy national security adviser for cyber and emerging tech at the White House under President Joe Biden, coordinated with CISA and other agencies, including the Office of the Director of National Intelligence, to support critical infrastructure sectors before Russia attacked Ukraine. She stressed that the government is crucial in helping these companies step up their defenses during a crisis. “The government can play a very important role in helping companies defend themselves, from sharing declassified intelligence regarding threats to bringing companies together to coordinate defenses,” Neuberger said. “Threat intel firms should lean forward in publicly sharing any intelligence they have. ODNI and CISA should do the same.” Spokespersons for CISA, the White House and the National Security Council did not respond to requests for comment on increasing concerns that cyber adversaries could target U.S. critical networks. Beyond federal resources, thousands of the nation’s critical infrastructure operators turn to information sharing and analysis centers and organizations, or ISACs, for threat intelligence. The Food and Ag-ISAC — whose members include the Hershey Company, Tyson and Conagra — and the Information Technology ISAC — whose members include Intel, IBM and AT&T — put out a joint alert late last week strongly urging U.S. companies to step up their security efforts to prepare for likely Iranian cyberattacks. In a joint statement from the groups provided to POLITICO on Monday, the organizations cautioned that even if no U.S.-based companies were directly targeted, global interconnectivity meant that “cyberattacks aimed at Israel could inadvertently affect U.S. entities.” ISACs for the electricity, aviation, financial services, and state and local government sectors are also on alert. Jeffrey Troy, president and CEO of the Aviation ISAC, said that in the past, companies in the aviation sector had been impacted by cyberattacks disrupting GPS systems, and that as a result, “our members remain in a constant state of vigilance, sharing intelligence in real time and collaborating on prevention, detection, and mitigation strategies.” Andy Jabbour, founder and senior adviser for the Faith-Based Information Sharing and Analysis Organization, said his organization is monitoring potential efforts by Iranian-linked hackers to infiltrate the websites of U.S. religious groups or spread disinformation. Jabbour said his organization is working with the National Council of ISACs on scanning for these threats, and noted that the council had stood up a program following the first strikes by Israel on Iran late last week to monitor for specific threats to U.S. infrastructure. The National Council of ISACs did not respond to a request for comment on whether they are preparing for evolving Iranian threats. Concerns about attacks on U.S. critical infrastructure linked to conflicts abroad have grown in recent years. Following the Oct. 7, 2023, attack on Israel by militant group Hamas, Iranian government-linked hacking group Cyber Av3ngers hacked into multiple U.S. water facilities that were using Israeli-made control panels. The intrusions did not disrupt water supplies, but they served as a warning to utility operators about devices that could be easily hacked and potentially targeted first in a cyber conflict with Iran. “If anti-Israeli threat actors make good on any claim of impacting critical infrastructure at this time … they’re going to look for the low-hanging fruit, easily compromised devices,” said Jennifer Lyn Walker, director of infrastructure cyber defense at the Water ISAC. Walker said that while her team has not yet detected any enhanced threats to member groups since last week, the Water ISAC would be sending out an alert this week, encouraging organizations to stay vigilant. “We don’t want to cause any undo panic, but for those members that aren’t already watching and aren’t already vigilant, we definitely want to amplify the message that the potential exists,” Lyn Walker said. Some of these groups noted that the lack of federal support so far in preparing for Iranian cyberattacks may be due to widespread changes across agencies since President Donald Trump took office. CISA, the nation’s main cyber defense agency, is expected to lose around 1,000 employees, and many of its programs have been cut or put on pause, including funding for the organization that supports the ISACs for state and local governments. CISA has also been without Senate-confirmed leadership since former Director Jen Easterly departed in January. “CISA is in a state of transition,” Jabbour said, noting that while “CISA is still accessible,” there had been no outreach to strengthen defenses against Iranian hackers since tensions erupted last week. It isn’t a complete blackout. Lyn Walker said that the Water ISAC has “received reporting from DHS partners who are striving to maintain continuity of operations and valuable information sharing during this challenging time.” There could also be another reason for the less visible federal response: “Shields Up” advisories are still available from 2022, when CISA worked with organizations to prepare for an onslaught of Russian cyberattacks tied to the war in Ukraine. Kiersten Todt, who served as chief of staff at CISA when the program was stood up, said that its legacy has heightened awareness of potential cyber pitfalls across the nation’s critical operations. “Because the [cyber] threat is so serious, all of those things ended up sustaining,” Todt, current president of creative company Wondros, said. “That ‘Shields Up’ mentality has now become part of the culture of critical infrastructure.” The enhanced level of vigilance reflects concerns that the threats from Iran could change quickly. Jabbour noted that a lot is in the hands of Trump as he weighs how heavily to assist Israel. “The next 24-48 hours will be interesting in that sense, and his decisions and his actions could certainly influence what we see here in the United States,” Jabbour said.

Vast amounts of valuable thermal energy are slipping through the fingers of Europe’s critical industries and institutions every day, as the heat escapes from their operations or remains untapped from natural ambient sources like nearby land, air or water. Today, some businesses and communities are harnessing this heat using innovative heat pump technologies to dramatically cut costs and CO2 emissions. As Europe races to revitalize key industries and accelerate growth, deploying heat pumps at scale is a key strategy for success. Consider this: in 2024 alone, Johnson Controls’ heat pumps cut energy costs for customers by 53 percent and emissions by 60 percent. > in 2024 alone, Johnson Controls’ heat pumps cut energy costs for customers by > 53 percent and emissions by 60 percent. Sound too good to be true? Let’s look at organizations realizing this powerful win-win every day. A hospital in Germany put a heat pump to work to tap heat energy 200 meters below the facility and realized a 30 percent cut in energy costs while producing enough heat to cover 80 percent of the hospital’s demand. The Aalborg hospital in Denmark is close to zeroing out carbon emissions, achieving an 80-90 percent cut while driving energy costs down by 80 percent. And in the UK, Hounslow Council transitioned from gas boilers to air source heat pumps, cutting its energy costs and CO2 emissions by 50 percent across more than 60 schools and public buildings. Natural and waste heat energy resources can be put to work for industry as well. Take, for example, a leading food company in Spain. Installing heat pumps at two of their manufacturing facilities enabled them to save €1.5 million per year and reduce CO2 emissions by nearly 2,000 tons, the equivalent annual emissions of around 400 homes. Nestle’s Biessenhofen plant in Germany also significantly cut energy costs for hot water production while lowering CO2 emissions by 10 percent.   The heat pumps powering these successes? Made by Johnson Controls here in Europe. So, the opportunity at hand is magnified as Europe can lead in cutting-edge energy technologies while putting the machines to work to boost core, centuries-old and critical legacy industries. To put the potential of industry heating needs and excess industrial heat in context, heat accounts for more than 60 percent of energy use in European industries, according to the European Heat Pump Association. Meanwhile, a leading European industrial company estimates that wasted heat in the European Union would just about meet the bloc’s entire energy demands for central heating and hot water. > To put the potential of industry heating needs and excess industrial heat in > context, heat accounts for more than 60 percent of energy use in European > industries, The fact is that untapped heat energy is everywhere. It’s critical that we put it to work now.  A catalyst for a competitive, energy-secure and sustainable Europe   Today EU companies pay 2-3 times more for their electricity than competitors in the United States and China — a disparity that puts a constraint on the competitiveness of European industries, according to analysis by the Draghi Report on the future of Europe’s competitiveness. The report calls for immediate action to lower energy costs and emissions as a combined competition and climate strategy.  With the visionary Clean Industrial Deal, European leaders are moving to do just that. Heat pumps can be front and center in this agenda. Heat pumps quickly bolster the bottom line: they are state-of-the-art, so they ensure the reliability and uptime of critical operations; and they are essential in driving every euro to growth and innovation instead of going out the door in excess energy bills. As leaders turn the Clean Industrial Deal into legislation this year, they can ensure essential industries and organizations prosper by including incentives for heat pumps, while also reforming electricity pricing so the full magnitude of savings can be realized. It is estimated that in Germany in 2024, for example, extraneous taxes on the electric bill represented 30 percent of cost — artificially increasing the cost of electricity and narrowing instead of increasing choices to meet critical energy needs with clean electricity.  Expansive troves of natural and wasted energy represent a huge opportunity for growth and competitiveness. Heat pump technologies are the enablers. They tap into this ‘free energy’ and transform it into the fuel that drives industrial processes, heats spaces, and delivers the higher temperature water and energy that’s essential for processing, pasteurizing, bulking and sterilizing. Natural and waste heat: a natural resource for companies   Seen at scale, our natural and escaping industrial heat are a new natural energy resource to be put to work, and a powerful economic catalyst to strengthen Europe’s competitiveness.   Visualization of the Hamburg Dradenau site where four 15-MW heat pumps will tap into treated wastewater to supply green heat to around 39,000 homes from 2026. Natural and waste energy is all around us. Recovering heat from a city’s wastewater treatment plant represents a powerful example. In Utrecht, the Netherlands, for example, a heat pump extracts residual heat from treated wastewater to provide heat to around 20,000 homes. And from 2026 in Hamburg, Germany, four large-scale heat pumps will extract heat from treated wastewater and feed it into the central district heating network, heating around 39,000 homes. Pharmaceutical companies, chemical facilities, and food and beverage enterprises are among the industries that can tap into energy they generate as a byproduct of the processes that produce the medicines and products we rely on every day.  In our modern data and information technology economy, data centers are among the biggest new sources of excess heat. The International Energy Agency notes that reused heat from data centers could meet around 300 TWh of heating demand by 2030, equivalent to 10 percent of European space heating needs. As artificial intelligence leads to increasingly more computing power in data centers, those numbers will grow significantly. The fact that up to half of the energy consumed by a data center is needed for cooling demonstrates how much heat is available. With heat pumps, we can capture that heat and put it to productive use. A trifecta for competitiveness, energy security and carbon neutrality Heat pump systems are key for Europe’s competitiveness, its energy security and tackling climate change. Tapping into the vast energy resources that are available everywhere and right now, heat pumps have the potential to become one of the continent’s next biggest industrial success stories. Let’s seize the moment for a future of economic strength and security, environmental health, and having pride in them being made right here. > Heat pump systems are key for Europe’s competitiveness, its energy security > and tackling climate change.

In a stern intervention, a judge at the High Court of England and Wales issued a formal warning to legal professionals on Friday, declaring that lawyers who submit fictitious cases generated by artificial intelligence could face criminal charges. The senior judge scolded lawyers in two cases who apparently used AI tools when preparing written arguments that were presented in court. “There are serious implications for the administration of justice and public confidence in the justice system if artificial intelligence is misused,” Victoria Sharp, president of the King’s Bench Division of the High Court, said in the judgment delivered on Friday. In the judgment, Sharp also referred to “concerns about the competence and conduct of the individual lawyers who have been referred to this court,” and concluded that all previous guidance seems to be “insufficient to address the misuse of artificial intelligence.” The lawyer denied using AI but admitted that she might have inadvertently done so while researching on the internet in preparation for her case. The ruling comes after so-called hallucinations — AI-generated fictions — have cropped up at big law firms since AI programs such as ChatGPT have become widely available.

Microsoft did not stop or suspend its services to the International Criminal Court, the company’s President Brad Smith said, following reporting that it canceled the email address of the court’s chief prosecutor targeted by American sanctions.  The Associated Press reported in May that Microsoft “cancelled” the email address of Karim Khan, the prosecutor who was directly targeted by a February executive order by United States President Donald Trump that claimed the court had “engaged in illegitimate and baseless actions” against the U.S. and Israel. Smith told reporters on Tuesday that Microsoft’s actions “did not in any way involve the cessation of services to the ICC.” A Microsoft spokesperson said that it had been in contact with the court since February “throughout the process that resulted in the disconnection of its sanctioned official from Microsoft services.” The spokesperson added that “at no point did Microsoft cease or suspend its services to the ICC.” Khan’s email disconnection has sparked Europe’s fears that Trump could flip a “kill switch” to cut digital services through American tech giants, as the continent seeks to become less dependent on U.S. technology. Companies like Microsoft, Google, Amazon and others dominate Europe’s cloud and digital services sectors. Microsoft declined to comment further in response to questions regarding the exact process that led to Khan’s email disconnection, and exactly what it meant by “disconnection.” The ICC declined to comment.  However, German business magazine WirtschaftsWoche reported Tuesday that Microsoft’s lawyers have now reached the view that it merely provides a technical platform and that its customers decide whether to give their employees access to its services. Microsoft would no longer intervene in scenarios similar to the ICC case, WirtschaftsWoche wrote. Smith at the end of April said Microsoft would push back on orders to suspend European cloud operations, in an attempt to assuage fears about a Trump-ordered kill switch. The company announced then that it would add a binding clause to its contracts with European governments and the European Commission, stating that it would keep the option open to go to court in the event other governments ordered it to suspend or cease cloud operations. “People want to know that there’s more than words that we’re offering, that’s why we’re prepared to back this up with contractual commitments,” Smith said at the time. Amazon and Google, Microsoft’s two main competitors on cloud services, also offer “sovereign” cloud services that seek to assuage Europeans’ concerns, though they have not publicly committed to challenging orders in the same way as Microsoft. Khan’s email issue has also prompted calls for a major change of government policy in the Netherlands, where the ICC is based. Bart Groothuis, a Dutch liberal member of the European Parliament, recently urged the creation of a European cloud, citing the ICC incident and saying “the world has changed.” And Dutch national lawmakers on Monday petitioned the government to use 30 percent Dutch or European cloud services by 2029, as well as multiple other measures to wean the Dutch government off U.S. services like Microsoft. It again signals a shift in the Netherlands, which has traditionally been one of the most Atlanticist, free-market and tech-friendly EU member countries. 

U.S. President Donald Trump’s imposition of tariffs on the EU should be the start of a “march to independence” for the continent, European Central Bank President Christine Lagarde said Monday. In an interview with France Inter two days before the U.S. president’s 25 percent tariff on automobile imports is due to take effect, Lagarde said the moment represented a unique opportunity for Europe, despite the likely short-term disruption to the economy. “I consider it a moment when we can decide together to take our destiny into our own hands, and I think it is a march to independence,” she argued, adding that this applied to the fields of finance and information technology as much as to defense and energy. In the interview, Lagarde also warned that it is still not possible to declare victory over inflation, given the high degree of uncertainty that persists at a geopolitical level. While the economy has struggled for momentum in recent months, the prospect of a major expansion of public spending in Germany has improved the growth outlook for the eurozone — and also raised the likely trajectory of inflation. The ECB’s Governing Council in recent days has appeared split over whether or not to carry on cutting interest rates at its next policy meeting on April 17. “We are nearly at target, but we have to stay there,” Lagarde said.

The European Commission has put Apple and Google on notice: Change your products so they’re in line with the European Union’s digital competition rules, or face the consequences. The EU executive ruled Wednesday that the two U.S. tech giants may be in breach of the EU’s Digital Markets Act (DMA), throwing down a gauntlet to U.S. President Donald Trump, who has sought to pull the issue of tech regulation into Washington’s escalating trade dispute with the EU. Apple and Google will need to overhaul some of their key products if they are to escape an infringement decision or fines that could reach up to 10 percent of their global revenues, the Commission said. But — seemingly aware of the potential to inflame transatlantic tensions — Commission Executive Vice President Teresa Ribera sought to depoliticize the rulings. “With these decisions, we are simply implementing the law,” Ribera said in a statement. Unlike previous non-compliance findings under the DMA, the EU executive did not hold a press conference to make its announcement. In recent weeks EU officials have sought to dial down the rhetoric on digital enforcement, appealing to the bloc’s common interest with the U.S. in enforcing competition rules. The Apple decision parallels a lawsuit that the U.S. Department of Justice is pursuing against the company. However, Joseph Van Coniglio, a competition policy expert at Washington-based think tank Information Technology and Innovation Foundation, said that while there are debates within the U.S. government on how to apply antitrust policy to Big Tech, a more mercantilist view on trade policy is likely to prevail when it comes to the DMA. He pointed to a February memo signed by Trump that promised to defend American companies from “overseas extortion,” citing the DMA and other digital policies. “I think the consensus is that the U.S. is going to be opposed [to the Commission’s decisions],” Van Coniglio said. The Apple decision parallels a lawsuit that the U.S. Department of Justice is pursuing against the company. | Magali Cohen and Hans Lucas/Getty Images Wednesday’s decisions come ahead of a set of heftier non-compliance rulings from the Commission later this month — which may include fines. DMA DEMANDS In order to comply with the DMA, the Commission said Apple will need to give its competitors the same access to a range of existing iPhone functionalities, such as notifications and device-pairing, as it provides to its own devices like the Apple Watch. The EU executive also stated that the company must overhaul how it communicates with developers. For Apple, the decision amounts to a “micro-managing” of the future of the iPhone, said Dirk Auer of the International Center for Law & Economics. Others believe the decision doesn’t go far enough. “Third party developers will still not have real app freedom and interoperability can still be hindered by Apple,” said Jan Pefrat of advocacy group European Digital Rights. Google, in turn, needs to make further changes to its Play Store and Google Search service to stop promoting its own services over those of rivals, the Commission said. Google’s European policy lead Oliver Bethell said the company has engaged in good-faith negotiations resulting in changes that have diminished traffic for European airlines and hotels. But the findings concerning Google’s search result page, which follows almost 15 years of similar antitrust casework, should send a signal to parent company Alphabet that its approach “needs to change radically,” said Emmanuel Mounier, head of trade group eu travel tech.

Cybersecurity experts including the United Kingdom’s former cybersecurity chief are pouring cold water over Elon Musk’s suggestion that a large-scale cyberattack on his social media site X came from Ukraine. Musk on Monday said X had been deluged by a “massive cyberattack” involving “either a large, coordinated group and/or a country.” The tech mogul and close ally of United States President Donald Trump later told the Fox Business channel that “there was a massive cyberattack to try to bring down the X system, with IP addresses originating in the Ukraine area.” But cybersecurity experts were quick to push back. “What Mr. Musk has said is wholly unconvincing based on the evidence so far. It’s pretty much garbage,” Ciaran Martin, a former chief executive of the United Kingdom’s cybersecurity agency, who now teaches at Oxford University, told the BBC on Tuesday morning. The cyberattack on X  impacted users since at least Monday morning and destabilized many features on the website, such as viewing posts and user profiles. Musk’s statements and cybersecurity experts’ observations suggest it was a so-called distributed-denial-of-service attack (DDoS), which involves pointing an overwhelming amount of traffic at a website to bring it down. In a DDoS attack, the origin of IP addresses is largely irrelevant: The attacks come from networks of electronic devices spread across the world, called “botnets,” that direct the traffic to a targeted website. Martin said that could mean some of those devices were from Ukraine, but “some of them will be from Russia, some will be from Britain, from the U.S., South America, everywhere. It tells you absolutely nothing.” Dmitry Budorin, founder of Ukrainian cybersecurity firm Hacken, said on X that DDoS attacks “botnets use hijacked devices worldwide, and the IP addresses seen in the attack traffic are just those of the infected machines, not the masterminds.” Reuters reported an industry source saying the amount of traffic coming from Ukraine appeared “insignificant.” A pro-Palestinian group called Dark Storm claimed responsibility for the attack on its Telegram channel. Cybersecurity researchers at Check Point Research, which has been tracking the group, told POLITICO the Dark Storm group had appeared to show proof that it had carried out the attack — but a spokesperson for Check Point warned that attribution “remains complex.” The cyberattacks on Monday came after days of organized protests and vandalism at industry sites of Musk’s car company Tesla, directly targeting the world’s richest man’s business interests in protest of his role spearheading massive cuts to government departments. Musk has also clashed with Ukraine’s government in recent weeks, including in an ongoing spat about Kyiv’s use of his satellite network Starlink. Lukasz Olejnik, a cybersecurity consultant and visiting senior research fellow at King’s College London, said “multiple scenarios should be considered” when analyzing Musk’s response, “including a potential false-flag operation, perhaps trying to blame Ukraine.” “In realistic terms, such a DDoS should not become a world-impacting event. But the figure of Musk and his importance in current U.S. politics changes the outlook,” Olejnik said.